October 25, 2018 / 3:40 PM / a month ago

StoneCo shares pop 33 percent in debut, hits $9 billion valuation

(Reuters) - Brazil-based StoneCo Ltd’s (STNE.O) shares rose as much as 34.1 percent in their U.S. market debut on Thursday, giving the credit card processor a market value of $8.88 billion.

The company’s shares opened at $32, a third above its initial public offering price of $24.

StoneCo sold 50.72 million shares on Wednesday, above the expected price range, raising $1.22 billion in total proceeds, which it expects to use for acquisitions. Stockholders sold 4.9 million shares. (bit.ly/2yvhgFA)

StoneCo has attracted interest from several big-name backers including Jack Ma’s Ant Financial, the operator of China’s biggest online payment platform, which has agreed to invest $100 million in the IPO, and Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) which has expressed an interest to buy up to 14.2 million shares.

Berkshire was not immediately available for comment.

The Sao Paulo-based company which serves over 200,000 digital and brick-and-mortar merchants, provides payment processing solutions including point-of-sale machines and payment gateway services.

Madrone Capital Partners, a U.S. investment firm that manages part of the fortune of the Walton family, the majority owners of Walmart Inc (WMT.N), has a 5.3 percent stake in StoneCo’s Class A shares, and Tiger Global Management has a 7.1 perent stake in its Class B shares.

StoneCo reported revenue of $164.9 million for the first six months of 2018, nearly double from a year earlier. It earned a profit of $22.7 million, from a loss of $19.7 million in the same period, a year ago.

Another Brazilian credit card processor PagSeguro Digital Ltd (PAGS.N), which competes directly with StoneCo, listed on the New York Stock Exchange in Jan. this year having raised $1.1 billion.

StoneCo’s other main competitors include Brazil’s largest payment processor Cielo SA (CIEL3.SA), First Data Corporation (FDC.N) and Global Payments Inc (GPN.N), the company said in a filing.

Goldman Sachs & Co, J.P. Morgan, and Citigroup were the lead joint underwriters for the IPO.

Reporting by Bharath Manjesh in Bengaluru; Editing by Shailesh Kuber

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