Nuvei (TSX:NVEI) Stock Crashes 55%: Now What?

Nuvei (TSX:NVEI)(NASDAQ:NVEI) stock collapsed by 55% on Dec. 8 after a short-seller report left investors in fear mode. So, what now?

| More on:
A stock price graph showing declines

Image source: Getty Images.

Nuvei (TSX:NVEI)(NASDAQ:NVEI) shares collapsed by 55% on Dec. 8 at the time of writing. The crash came from a short-seller report by Spruce Point Capital Management, creating massive losses for Nuvei stock.

What happened?

You may recognize the name of Spruce Point, and you should. Spruce Point was the same company that created a report on Lightspeed Commerce back in September, causing shares to fall 30%. Those shares are still less than half their value from that report.

The Nuvei stock report by Spruce Point accused the company of “shady business dealings,” leading to fraud allegations. Furthermore, the company believes there is evidence the chief executive officer falsified his educational credentials.

That’s the drama, but the numbers are what investors should really pay attention to. Nuvei stock “claims significant benefits from e-commerce volumes, but that organic growth has been under pressure.” This led to questions as to why the company would take on so many acquisitions. Given all this, Spruce Point believes the company has a 40-60% downside, which led to almost a 60% loss in share price.

So what?

Analysts still have yet to weigh in on the report. However, there are a lot of claims that investors believed in during at least the short term during the Lightspeed drama. And those losses have yet to recover. And the allegations are serious if proved correct.

As fellow Fool writer Jitendra Parashar highlighted, Nuvei stock “has covered up a pattern of business failures,” it has a “web of relationships with individuals connected to major Ponzi schemes,” and its “business is declining organically in North America.”

Now what?

This comes at a time when Nuvei stock came down slightly but was on its way back towards 52-week highs. It’s been one of the tech stocks to see a dramatic rise since its public listing. And it’s one that could lead to a fear-led drop rather than one based on fact.

As I mentioned, analysts have yet to weigh in on what investors should do with Nuvei stock today. With Lightspeed, many have since weighed in to state the selloff has gone way too far — especially given that it’s made major partnerships and its acquisitions are now up and running.

For Nuvei stock, this is a brand-new volatile situation. So, it’s definitely a time to wait and see. One thing I would recommend at this point is the hold the stock rather than sell it. You’re certain to take on a loss. However, if you’re looking to buy, I would wait for analysts to weigh in first.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe owns shares of Lightspeed POS Inc. The Motley Fool owns shares of and recommends Nuvei Corporation. The Motley Fool recommends Lightspeed POS Inc.

More on Tech Stocks

Shopping and e-commerce
Tech Stocks

1 Tech Stock You’ll Be Glad You Bought When the Bull Market Starts

Historically, tech stocks have done well during bull markets. Here’s one you’ll be happy you bought before the next bull…

Read more »

A person builds a rock tower on a beach.
Dividend Stocks

3 Stocks to Anchor Your Portfolio in a Rocky Market

Three stocks are solid anchors in any portfolio today for their outperformance in a weak market and defiance of the…

Read more »

edit Sale sign, value, discount
Tech Stocks

2 Cheap Tech Stocks to Buy Right Now

Many tech stocks offer exceptional returns compared to other stock sectors when the market is bullish. You can add to…

Read more »

Hands shaking over a business deal
Tech Stocks

Got $5,000? These 2 Growth Stocks Are Smart Buys

Are you looking to invest $5,000 in the stock market? Here are two of the best growth stocks you can…

Read more »

man sitting in front of 3 screens programming
Tech Stocks

2 Best Software Stocks to Buy in 2023 and Beyond

Salesforce (NYSE:CRM) and Constellation Software (TSX:CSU) are the two best software stocks to buy this year and beyond.

Read more »

consider the options
Tech Stocks

Is it Too Late to Buy Shopify Stock?

Shopify is one of the most popular stocks on the market. Is it too late to buy shares?

Read more »

Tech Stocks

2 Best Canadian Stocks Under $10 to Buy Now

Cheap TSX stocks such as Payfare and StorageVault are trading under $10. Both these stocks have significant upside potential in…

Read more »

edit Businessman using calculator next to laptop
Tech Stocks

Better Buy: BlackBerry Stock vs. CrowdStrike

BlackBerry and CrowdStrike are tech stocks part of the cybersecurity segment. Which is a better buy between CRWD stock and…

Read more »