Mercadolibre Retail Investors Double Down On Their Bullish Take On Stock After Its Worst Drop In About A Year

Retail sentiment for MercadoLibre shares on Stocktwits turned 'extremely bullish' late Tuesday, from 'bearish' the previous day, after the stock suffered its worst drop in nearly a year.

U.S.-listed shares of Latin America's largest e-commerce company fell 6.6% to $2,336.94 in Tuesday's session, but edged up 0.5% in extended trading. There was no apparent trigger for the move, leaving investors guessing.

The ticker drew brisk chatter on Stocktwits, with the 24-hour message volume climbing over 637%.

A user suggested that leaked news, which has yet to be released to the public, could be behind the stock drop.

"I see no news on the wires. There could be some unspoken news, such as leaks on tax policy changes being considered, but none of that may impact MELI," posted this user.

"In fact, the current opinion seems to be that MELI will escape all but tax reporting requirements and won't be subject to the potential 7% Digital Services Tax."

Currently, Mexico, Argentina, Chile, Peru, and Colombia tax digital services by foreign companies. Effective 2027, Brazil will tax foreign digital service providers and marketplaces a 28% VAT-making it one of the highest rates in the region.

That said, retail investors considered the event a buying opportunity.

"$MELI I bought. It's too much of a move..." a user posted

MELI stock has traded within a range-bound pattern since its last earnings report on Aug. 1 and is up 37.4% year-to-date, heading for its third consecutive yearly gain.

Last week, Cantor Fitzgerald raised its price target on the stock to $2,900 from $2,700, and maintained its 'Buy' rating. The company has plenty of levers to sustain strong top-line and EBIT growth in 2026, the brokerage noted.

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