MercadoLibre, Inc. (MELI)

The unrestricted sellers have basically washed themselves of their positions over the past few days following the filing with the SEC. This is empirically supported by historical data when the lockup period approaches - this large selloff should have been expected. Furhtermore, the slight miss on the revenue number only added to the selloff frenzy. There is a float of 37 million and judging by what the company filed, they are looking to sell only about 5.5 million (292 million / $54.5 per share). That wont have much impact downwards although the price could dip a little more before turning around. With the slight miss on revenues as well as the secondary offering there is really nothing left to drive this much lower at all. I suspect given the valuation here, that buyers on sitting on the sideline ready to purchase MELI following or on the lockup date. I suspect that this will begin an upward climb from there and lead to sigfnicant outperformance from mid February on. I am not a Cramer fan at all but I do agree with him that you may want to buy in on the secondary offering - especially if u bought in the 70s - lower ur average cost. Finally keep in mind that several of the insiders (5% or more holdings) have already said they have no intention of selling - such as Tiger, General Atlantic and Ebay - clearly they see the potential - I suspect that most of the insiders selling will be the CEO for one and the other gentleman who owns 3.5 million shares - The CEO has in the past sold close to 2 million shares when the IPO came - so why not do it again - those two together will make up most of the insider selling of the proposed 5.5 million shares or less. Finally, 1/2 of the sale will be to raise funds for acquisitions anyways etc - so not everyone is selling to cash out and take a profit. Given this business model, growth will come through expansion. They have already started buying competitors and it will only continue going forward. Doesnt anyone realize the purchase of the car seller site is big (tucarro)? Thats been the strongest part of their market thus far and this acquisition will only drive up earnings that much more - and fraud is reduced because its car dealers making the sales rather than individuals. The results dont reflect that this quarter. I think we have come very close to hitting bottom on the stock price here and I look forward to increasing my position. Its interesting to me that the stock has gone up the last two days and volumes are down slightly to more normal levels which tells me the sellers (traders) have mainly been driven out - the investors are ready to step in. Thats my 2 cents. Cheers,