Mercadolibre Plummets 4%: Credit Risks and Robotics Spark Investor Frenzy

Summary
• MELI trades at $1,992.21, down 3.97% from its $2,074.48 previous close
• Intraday range spans $1,957.00 to $2,037.50, reflecting volatile retail investor sentiment
• Partnership with Agility Robotics to deploy Digit robots in Texas warehouses announced
Today’s sharp selloff in Mercadolibre has erased nearly $80 billion in market cap, driven by concerns over fintech credit defaults and sector-wide retail volatility. The stock’s 4% decline contrasts with Amazon’s 1.85% gain, highlighting divergent risks in the Internet Retail sector.

Credit Expansion and Rising Defaults Weigh on MELI
The primary driver of MELI’s selloff lies in its fintech arm’s aggressive credit expansion. The third-quarter report revealed an 83% year-over-year surge in the credit portfolio to $11 billion, with net interest margin after losses easing to 21% amid rising funding costs in Argentina. While fintech revenue is projected to grow 45% in Q4 2025, the 58% year-over-year increase in the provision for doubtful accounts has eroded investor confidence. Analysts warn that the shift toward longer-duration credit cards and slower cohort maturity will pressure margins, even as engagement metrics improve. This tension between growth and profitability has triggered a risk-off reaction in the market.

Internet Retail Sector Mixed as Amazon Gains Ground
The broader Internet Retail sector remains fragmented, with Amazon (AMZN) surging 1.85% as it dominates retail media and logistics. MELI’s 3.7% decline contrasts sharply with the sector’s resilience, highlighting its unique exposure to Latin American credit cycles. While e-commerce peers like Sea Limited (SE) and Nu Holdings (NU) face similar fintech challenges, MELI’s reliance on high-risk lending and its recent partnership with Agility Robotics for warehouse automation have amplified volatility. The sector’s mixed performance underscores the divergence between pure-play e-commerce and fintech-driven models.

Bearish Technicals and Speculative Options Playbook
• 200-day average: 2,273.62 (well below current price)
• RSI: 51.30 (neutral but bearish bias)
• MACD: -19.90 (negative momentum)
• Bollinger Bands: Lower band at 1,946.24 (near support)
The technical landscape for MELI is bearish in the short term, with the stock trading below all major moving averages and MACD signaling weakening momentum. Key support levels to watch include the 200-day average ($2,273.62) and the lower Bollinger Band ($1,946.24). A breakdown below $1,957.00 could trigger further selling, while a rebound above $2,037.50 (intraday high) may test the 30-day moving average at $2,123.13. Given the high implied volatility and leverage ratios in the options chain, short-term bearish strategies appear most viable.
• MELI20260123C2010 (Call Option):
- Strike Price: $2,010
- Expiration: 2026-01-23
- Delta: 0.0107 (low sensitivity)
- Gamma: 0.0206 (moderate sensitivity to price changes)
- Theta: -0.0203 (moderate time decay)
- Implied Volatility: 0.20% (extremely low)
- Lverage Ratio: 399,302.74% (extreme)
- Turnover: 0
- Payoff (5% downside): $0 (strike above current price)
- Why it stands out: The extreme leverage ratio makes this contract highly speculative, but its low delta and gamma suggest minimal directional exposure. Ideal for volatility plays, though liquidity is nonexistent.
Aggressive bears should monitor the $1,957.00 support level. A break below this could validate the bearish case, making the MELI20260123C2010 call option a speculative play for volatility-driven rebounds.

Backtest Mercadolibre Stock Performance
The backtest of MELI's performance after a -4% intraday plunge from 2022 to now shows favorable results, with win rates and returns indicating the stock's resilience and potential for positive gains in the following days:

MELI at Crossroads: Credit Risks or Resilience?
Mercadolibre’s near-term trajectory hinges on its ability to stabilize its credit portfolio and demonstrate margin resilience. The stock’s technical indicators and options chain suggest a high probability of continued weakness, with the 52-week low of $1,646.00 posing a long-term floor. Investors should closely monitor the $1,957.00 support level and the $2,037.50 intraday high for directional clues. Meanwhile, Amazon’s 1.85% gain underscores the sector’s divergence, offering a benchmark for MELI’s fintech-driven risks. For now, short-term bearish strategies and volatility-based options appear most compelling. Action: Watch for a breakdown below $1,957.00 or a surprise earnings beat to reverse the downtrend.