American (AMER3): from the highest rise of the Ibovespa to the collapse with RJ, the roller coaster of the shares of the retailer in January

From the largest increase of Ibovespa up to the 11th, with advances of 24.35%, to the exit from Ibovespa due to a judicial recovery request on the 20th – but not before suffering historic losses, with a drop of 77.33% only in the January 12 session. After that, sessions of strong volatility were experienced, with an increase of almost 16% on the 13th, but drops of 38%, 42% and 29% in the respective sessions of the 16th, 19th and 20th of the same month.

In the early days of the year, it would be hard to imagine that Americanas (AMER3) stock could go through such volatility and, more importantly, that the company would be faced with such a complicated situation, with litigation with banks and several allegations, after the surprising announcement of accounting inconsistencies for R$ 20 billion last January 11th. The announcement was just the beginning of what is shaping up to be a long history of stock market ups and downs for the retailer.

At the end of January, the stock also reached several highs, but far (very far) from erasing the losses recorded. From the close of January 20 (when the trading session ended at R$0.71) to the close of January 31 (when it closed at R$1.75), the shares have already risen by 146.5%.

However, in the pre-disclosure session (January 11) of the billion-dollar accounting inconsistencies that culminated in the retailer’s bankruptcy filing, the AMER3 card was worth R$12, or an accumulated decline of 85.4%. In other words, for equity to return to that level, a 585.71% increase in the quota would be required.

As evidenced by TradeMap data, the highest price of AMER3 after the reporting of the accounting problems occurred on January 13, when the stock registered R$ 3.15 per share and, from that date until the end of January, the decline is state of 44.44%.

Check out the ups and downs of Americanas stock in January below:

Source: InfoMoney

The stock’s volatility isn’t exactly a surprise, as analysts point out that the assets of companies in the process of judicial recovery tend to have extreme reactions on the stock market, which calls for caution.

“We expect shares to continue to suffer from high volatility as RJ’s moves typically end up diluting shareholders. Furthermore, we emphasize that RJ’s process is very time consuming, requiring at least 2 years, however, it often exceeds this period, as in the case of Oi (OIBR3), where the process lasted more than 6 years. Within the process, the lawyers end up being able to considerably lengthen the terms, and the Assemblies are strategically scheduled and rescheduled several times, as a maneuver to lengthen this deadline”, highlighted Levante.

In clarifying to B3 and the Securities Commission (CVM) the sharp fluctuations in its assets in recent trading sessions last week, the company said its shares had been subject to speculation and rumors “over which it has no control”.

JPMorgan highlighted in a report this week that visibility of Americanas’ recovery process remains low, mainly due to the fierce legal battle with the banks. “And this is something that will likely start to take its toll on the company’s operations as it affects supplier relationships[del mercato]and with 3P sellers, leading to a rapid deterioration in operating results as inventories roll over and the firm continues to operate cash-strapped,” the bank’s analysts stress.[domarketplace)levandoaumarápidadeterioraçãodosresultadosoperacionaisàmedidaqueoestoquegiraeaempresacontinuaoperandocompoucaliquidezdecaixa”apontaramosanalistasdobanco[domarketplace)levandoaumarápidadeterioraçãodosresultadosoperacionaisàmedidaqueoestoquegiraeaempresacontinuaoperandocompoucaliquidezdecaixa”apontaramosanalistasdobanco

Check below the timeline of the Americana case (with information from XP Investimentos):

Jan/11: To that date, the shares had amassed gains of 24.35% in 2023, pending a “turnaround” in operations under the new command.

Jan/12: 77.33% drop in the share, closing at R $ 2.72

Jan/13: shares climbed 15.81%, to BRL 3.15

• The creditors are demanding early repayment of the company’s debts

• Reports indicate that the major shareholders have proposed a capital increase of R$6 billion, while the creditor banks have requested a minimum of R$10 billion

• The company obtains Emergency Protection, suspending the early repayment of debts and any obligations for 30 days

Jan/16: 38.41% drop in assets

Jan/17: 2.06% drop in shares

Jan/18: 8.42% drop in shares

• After a series of requests, the Rio de Janeiro Court of Justice granted BTG Pactual (BPAC11) a favorable decision, for the compensation of R$ 1.2 billion of Americanas cash deposited with the bank, leading to a legal dispute . The decision led other institutions where the company maintains its liquidity to follow suit, impacting its liquidity, according to the material fact.

Jan/19: 42.53% drop in shares

Jan/20: 29% drop in assets, with the stock closing at R$0.71, the lowest, accumulating 94% losses since the January 11 close

Jan/23: +12.68% compared to AMER3

• Announcement of the hiring of global services consultancy Alvarez & Marsal (“A&M”) to act as Project Management Office (PMO) (“PMO”) in connection with the judicial recovery process. A&M will act in coordination with Rothschild & Co, the Company’s interlocutor in the renegotiation of the financial debt.

Jan/25: share rises by 17.5%

There were three events on this date:

(i) the list of creditors was released in the morning, with a total debt of R $ 41.2 billion in favor of 7,967 names. There have already been rallies over the reported amounts, notably from BV and Deutsche Bank, but Americanas has yet to comment;

(ii) The day before, Americanas unblocked R$1.2 billion of funds held by BTG Pactual, as well as amounts blocked by Banco Safra and Banco Votorantim. However, on the 27th, the decision involving BTG was reversed.

(iii) Americanas requested the extension to the United States of the protection mechanisms deriving from the judicial recovery process in Brazil. Known as “Chapter 15”, it is not actually a RJ request in the country, but the extension of the benefit of the suspension of payments to creditors.

Jan/26: the share rose by 9.57%

• The Court accepted Bradesco’s fraud assessment request (BBDC4), for the search and seizure of evidence against Americanas. The bank will have access to the email exchanges of directors, directors and employees from the last ten years. Ernst & Young (EY) was hired for the experience. It is worth mentioning that other banks, such as Itaú (ITUB4) and Santander (SANB11), as well as eight unions, have also filed separate actions to try to hold those involved, including key shareholders, accountable.

Jan/27: the stock closed up 16.5%

– The CVM has opened two other administrative investigations related to the Americanas case, to investigate the use of privileged information (exchange of privileged information), as well as the irregularities of accounting inconsistencies.

Jan/31: the share closes at a high of 20.69%, at R$ 1.75, but accumulates losses of 81.87% in the month

At the same time, Americanas’ creditors began organizing to have more leverage in negotiating the retailer’s judicial recovery process. Broker Seaport Global Securities, through its restructuring arm Pericles, has joined forces with Brazilian law firm Felsberg Advogados to propose a strategy proposal to bondholders and bondholders in which such groups have voting rights .

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