Brazil: Magazine Luiza retailer in crisis (again)

Magazine Luiza has taken the lead in the crisis involving itself, the bank Itaú and the founders of the e-commerce site KaBuM!

The retailer has been shielding Leandro and Thiago Ramos of KaBuM! since the brothers filed a lawsuit against Itaú, claiming that the financial institution favored Magalu in purchasing the site to the detriment of other interested parties, such as Havan.

From the Trajano family to the company’s walls, everyone knows that the brothers’ fury is centered on one issue: the overwhelming fall of Luiza Helena Trajano‘s company shares in less than two years.

In July 2021, when it was a darling of the Stock Exchange, Magazine Luiza announced to the four winds that it had just closed the largest acquisition in its history: the purchase of KaBuM!, worth R$1 billion in cash and R$125 million more in shares of the retailer, which was flying at prices higher than R$23.

The deal could be worth, under the conditions of the time, R$3.5 billion.

The brothers’ disappointment began in 2021 when Magazine Luiza’s shares plummeted.

Last week, more nightmare: after a Wednesday with more than 10% drops, the stock melted to R$3.15 on Thursday 2.

On the last day of January, the founders of the website for gamers and the geek community, and one of the precursors in electronic sports in the country, filed this lawsuit in the Court of Justice of São Paulo.

They want e-mails and messages from the bank on everything related to surveys of potential buyers, such as Luciano Hang‘s retailer in Santa Catarina.

In response to the column, Itaú contests and says that KaBuM! shareholders were “absolutely aware that there could be fluctuation of values in the stock market,” the bank says in a statement.

“We regret the existence of an unfounded lawsuit that apparently has the sole objective of causing embarrassment.”

With information from Revista Oeste