The market is neither sad nor happy. He sets the prices. Investors sell and buy securities according to their prospects of generating value for one company or another, as well as based on the return they imagine they will get from lending money to a country or a company.
This serves for the resounding fall of the Ibovespa and the expressive rise of the dollar during the last speech of president-elect Lula – with harsh criticism of “fiscal stability” and incentives for the expansion of social spending. And it will serve for future speeches.
The market is what it is. The PT leader’s opinion does not change that. As well as it was no use when the current president, Jair Bolsonaro, complained about the drops in the price of Petrobras shares, when he interfered in the management of the oil company.
It doesn’t matter if the “thesis” defended by the president is the greater good — to make gasoline cheaper or to end hunger. What drives someone to buy or sell securities in the financial market is the expectation of return. And this has economic and political consequences.
The rule is valid for politicians and, mainly, for companies.
Just over a year after debuting on the Stock Exchange, TC, a company whose mission would be to “improve the financial market and people’s lives” is trading its TRAD3 shares for 17.5% of the price they were worth at launch, in July last year.
The company is in a bitter fight with the analysis house Empiricus, which I have already written about here. Anonymous videos, police reports and even rape accusations entered the circle. And that, I emphasize, is good to remind us that the market is made by people.
This Thursday (10), TC, former Traders Club, released its balance sheet for the third quarter of this year. And there was a striking negative Ebitda of R$ 26.975 million. A record, in a bad way.
Ebitda is an acronym for what, in Portuguese, means “Earnings Before Interest, Taxes, Depreciation and Amortization”. Simply put, it is how much cash the company is generating considering only its core business (and not financial investments for the period, for example).
In other words: the TC is far from making enough money to cover the expenses and expenses of the business. Unfortunately, it’s not an outlier. Last quarter, Ebitda was negative by R$ 14 million. In the previous year, it was R$ 19 million below zero. The last time it was positive, by the way, in the first quarter of 2021, before the company was listed on the Stock Exchange.
Gross profit, which is the simple calculation of revenue minus costs, had a brutal drop, reaching almost half of what it was in previous quarters. This while the company laid off 27% of its employees compared to the end of last year.
The weight of such negative results may have gone unnoticed by the most daring investors, who only “gave a glance” at the company’s earnings release. In the document, all variations, positive or negative, were colored bright green, alongside a green delta, which could clearly be mistaken for an up arrow.
In addition to the “optimistic design”, on the same day as the results were published, a news item was published rekindling the fight between TC and Empiricus. “Exclusive: Audio Reveals Empiricus CEO Action Before Anonymous Video Against TC Company,” reads the headline.
It was enough for TC to convene a press conference only for its CEO to reaffirm that he had been the victim of market manipulation by Empiricus, to bring down his company’s shares. Thus, in a few hours, balance and real numbers left the scene, to make room for accusations and narratives.
The TC assures that it had nothing to do with the release of the news, as well as that the gaudy green color with which he painted his negative results was just a use of standard colors. In email, it recognizes that there is an “opportunity to evolve” the layout of the results disclosure.
And then we go back to the beginning of the text. The market is what it is. Narratives, goodwill, or accusations don’t change real-world numbers. And understanding this is essential to look with the right focus and take advantage of trends in your investments. Instead of “picking a side” to root for, it’s better to understand each one’s role in the game.
Chad-98Weaver, a distinguished author at NewsBulletin247, excels in the craft of article writing. With a keen eye for detail and a penchant for storytelling, Chad delivers informative and engaging content that resonates with readers across various subjects. His contributions are a testament to his dedication and expertise in the field of journalism.
