StoneCo Ltd. Releases CEO Letter to Shareholders

About this update from Stoneco Ltd.

[{"type":"text","content":"SÃO PAULO, Brazil, April 19, 2019 (GLOBE NEWSWIRE) -- StoneCo Ltd. (Nasdaq:STNE) (\"Stone\") today released the following CEO letter:To our shareholders:As we have seen in the past, competitor campaigns generate a lot of noise, but we remain focused on delivering a differentiated value proposition to our clients through our proprietary and disruptive business model. However, given some recent inquiries we have received and the lack of information in the market we wanted to share some of our thoughts and perspectives to put some of this noise into context.Aggressive Initiatives to Recover Lost Share from Legacy Providers is Nothing New We have seen numerous aggressive initiatives from competitors in the past, including discounts, promotions and \"zero rate\" offers, in an attempt to lure customers to legacy bank offerings that have been losing market share and to force clients to use additional bank services. For example, we have seen legacy providers announce high double digits discounts to our clients, which turned out to be closer to 5% or 10% in reality. We have also seen competitors offer 0% MDR rates to our clients, which turned into much higher rates after 3 months. Despite these efforts in the past, we have seen limited impact to our business, which has continued to produce growth and market share gains.Anti-Competitive Actions from Banks are Not Uncommon in BrazilWe have seen banks in Brazil fined for anti-competitive actions as a result of their attempts to gain market share through untransparent pricing strategies. That´s how some large players in the country have been doing business for years. For example, Itaú paid fines in the recent past for anti-competitive measures that tied offerings together in an attempt to win new business. As noted in our prospectus, it was in 2010 that the Central Bank of Brazil and Brazilian antitrust authorities implemented a series of initiatives to create a regulatory framework aimed at fostering a more open and competitive environment. We designed Stone to disrupt the incumbents model and their practices by providing differentiated offerings to our clients through a strong client-centric culture as well as fair and transparent rates.At This Moment, The Latest Incentive Offers from Competitors Don't Change Our Strategy We are always monitoring our competitive landscape and taking note o...

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