Stone: André Street returns to the company’s routine to put credit on the axis


The founding partner of StoneCo, André Street, is back to the daily routine at the company, with his belly on the counter. Street is chairman of the board of directors, but he resumed his daily schedule in the business in July, when the company realized the challenges ahead in the credit operation. He went to reinforce the team, alongside Thiago Piau and Augusto Lins.

Since then, in addition to being directly involved in decisions related to this activity, he has met with authorities, partners and customers. The focus is always the same: finding a solution for the functioning of the credit card receivables registration platform.

The company recorded a loss of R$ 150 million in the second quarter of this year, due to a write-off of almost R$ 400 million, related to the loss with the granting of credit. The problem has become a drama in the market. The company’s shares, which surpassed US$ 95 in February, ended yesterday’s trading session on the Nasdaq with a drop of almost 6%, at US$ 46.54. The company’s market value, which reached almost US$ 35 billion, ended the day yesterday at around US$ 14.5 billion.

It is not by chance, therefore, that on Street’s list of commitments there are also conversations with investors to explain what the problems in the receivables market are, what Stone’s plans are, and also to make a “mea culpa” on the part that belongs to the company in the current framework.

Were it not for this issue, the company and its investors would be celebrating. The second quarter would have registered the first net revenue above R$ 1 billion, which would be an expansion of 68% over the same period in 2020. The active client base also reached the historic mark of more than 1.0 million, with the increase of 188 thousand paying users.

The volume of payments (TPV) that went through the company’s network was the largest in history, quarterly, discounting the effects of the coronavoucher: R$ 58.6 billion, almost 65% year-on-year expansion. Considering only small and medium-sized companies, this volume jumped more than 103% in the annual comparison, to R$ 39.3 billion.

born for credit

To investors Street begins by explaining: “Stone was born, since its 1st, to give credit. It was born waiting for the 7th of June to arrive”, he comments, referring to the date on which the trading and registration system of card receivables allowed by the Central Bank (BC) was inaugurated.

With that, he makes two things clear. The first is that, despite having suspended the granting of resources until the structural problem of the market is solved, this will continue to be the company’s mission. And second, that pioneers pay the price of breaking the stones of the paths. Stone has always been actively involved in discussions and debates for opening up this market.

Stone’s central credit strategy is the prospect of micro, small and medium businesses having access to credit in Brazil as they have never had before with large commercial banks. Like? Offering credit card receivables as collateral for commitments. It is like a payroll from the legal entity. In place of salary, the entrepreneur commits a portion of his future income.

The success of this operation is based on two pillars: access to data that Stone has from customers, making the revenue projection possible (one of the reasons why it even invested more than R$ 6.5 billion in the purchase of the company from software Linx) and the proper functioning of the structure planned by the BC.

With that in mind and keen from birth to credit, Stone was quite thirsty for the pot. At the end of the first quarter of this year, it had accumulated almost R$ 2 billion in its credit portfolio.