StoneCo's Linx Sale: Assessing the Priced-In Reality

The market's reaction to StoneCo's recent news reveals a clear gap between what was expected and what was new. The Linx sale itself was not a surprise. The deal was announced in July 2025, giving investors over seven months to digest the news before its formal closure in February 2026. By the time of the closing announcement, the transaction was largely priced in, a fact underscored by the stock's muted reaction to the final settlement.

The real market jolt came later, with the news of the CEO's resignation. Shares fell 5% on that announcement, a move that occurred after the stock had already declined 5.2% over the past five days. This sequence suggests the resignation introduced fresh uncertainty that the market hadn't fully accounted for, creating a temporary expectations gap. The sale's closure was a known event; the leadership change was a new variable.

Viewed through the lens of valuation, the current setup is one of disciplined capital return, not a windfall. The stock's enterprise value to EBITDA multiple of 5.5x reflects a market that has already discounted the sale's proceeds. The focus now shifts to how StoneCo deploys that capital and whether the new leadership can navigate the integration and maintain the core payments growth trajectory. The hype around the Linx deal has faded; the reality is a company returning capital and facing a leadership transition.

What Was Already Priced In: The Deal's Financial Mechanics

The financial mechanics of the Linx sale tell a story of a strategic, not a desperate, exit. The total deal value of R$3.41 billion is substantial, representing a significant capital return to StoneCo. Yet the market's initial skepticism about the price was not without foundation. Reports indicate that multiple nonbinding offers were below what StoneCo paid for the asset in 2020. This suggests the sale was a negotiation, not a fire sale, and that the final price reflects a compromise between StoneCo's valuation and buyer caution.

The unit's financial profile helps explain why the sale was both meaningful and non-essential. Linx contributed a dominant share of the software segment, accounting for 79% of its 2024 revenue and 71% of its profitability. This makes it a major asset, but one that was likely seen as a distraction from StoneCo's core payments business. Selling it allows the company to focus capital and management attention on its core engine, a move that may have been more valuable than the sale price itself.

Crucially, the deal removes a significant overhang. The Brazilian antitrust regulator, CADE, granted unconditional approval without restrictions. This clears a path for the transaction to close smoothly and eliminates the regulatory uncertainty that often weighs on a company's valuation. For a market that had already discounted the sale's proceeds, this clean regulatory exit was a positive, but expected, development.

The bottom line is that the market's muted reaction to the closing is logical. The sale's financial details-a substantial but negotiated price for a large, non-core unit, with a clean regulatory path-were already in the price. The stock's recent decline appears driven more by the CEO's resignation and broader sentiment than by a reassessment of the Linx deal's economics. The financial reality of the sale was, for the most part, priced for perfection.

The Real Financial Math: Proceeds vs. Goodwill

The sale's financial impact is more nuanced than a simple cash-in hand. While StoneCo received R$3.41 billion for Linx, it retains a significant ongoing cost: the fiscal goodwill of approximately R$3.8 billion from its original acquisition. This goodwill will be amortized against future earnings over the next eight years. In effect, the company is trading a large, one-time cash inflow for a steady, multi-year charge. This creates a key asymmetry: the market sees the proceeds as a capital return, but StoneCo's income statement will continue to bear the cost of the asset it no longer owns.

The company's strategy to mitigate the revenue loss is clear. StoneCo will continue serving its clients' software needs through its robust partnership program and native horizontal business management solutions. This suggests a shift from direct ownership to a platform model, aiming to retain some software revenue and client relationships. However, the scale of the asset sold-accounting for 79% of the software segment's revenue and 71% of its profitability in 2024-means this transition is critical. The success of the partnership and integrated solutions will determine whether the goodwill amortization erodes earnings more than the lost Linx profits.

The primary catalyst for clarity is the upcoming 4Q25 earnings call on March 2nd, 2026. Management will detail how the sale proceeds are to be distributed. This is the moment investors will get concrete answers on whether the capital is being used for debt reduction, share buybacks, or reinvestment in the core payments business. Until then, the financial math remains partially obscured. The goodwill charge ensures the sale's cost will be felt for years, while the partnership model's revenue contribution is still unproven. The market has priced in the cash, but the real story is in the earnings trajectory post-amortization.

What to Watch Next: Catalysts and Risks

The Linx sale is now a closed chapter, but the real test for StoneCo's value creation begins with the execution of its capital allocation plan. The immediate catalyst is the leadership transition. The resignation of CEO Pedro Zinner and the appointment of CFO Mateus Scherer as his successor introduces a critical risk. Scherer has been a key architect of the company's disciplined capital framework, but moving from a financial strategist to a full-time CEO is a significant step. The market's muted reaction to the sale's closure suggests the financial mechanics were priced in, but the new leadership's ability to navigate the integration and maintain the core payments growth trajectory will now be the primary driver of the stock's path.

Investors should watch for concrete updates on the company's growth guidance and capital return plans in the upcoming 4Q25 earnings call on March 2nd, 2026. This is the moment management will detail how the R$3.41 billion in proceeds are to be distributed. The options-debt reduction, share buybacks, or reinvestment in the core business-will signal the company's forward priorities. Any shift in the capital allocation framework or a change in the tone around growth targets will be a key signal. The success of the new partnership model for software services will also need to be monitored, as it must offset the revenue and profit lost from the Linx divestiture.

The broader risk is that the market's current valuation, with an enterprise value to EBITDA multiple of 5.53x, already reflects a "priced for perfection" view on StoneCo's execution. The stock has been volatile, with a 5.2% decline over the past five days and a 2.7% daily volatility, indicating underlying uncertainty. If growth in the core payments business slows, or if the goodwill amortization begins to pressure earnings more than expected, the market's high expectations could be challenged. The sale removed a distraction, but it also removed a significant profit center. The new leadership must prove they can grow the remaining engine fast enough to justify the current valuation, all while managing the transition. The catalysts are clear, but the risks of execution and growth are now front and center.