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PagSeguro and StoneCo– Not “seguro” after all

Author: Published on: Published in: Pagseguro NYSE:PAGS

October 27, 2021 –Viceroy are short PagSeguro (NYSE:PAGS) and StoneCo (NASDAQ:STNE), two Brazillian focused payment processors. After a raid by the FBI in conjunction the Department of Homeland Security on PAX Global Technology Ltd’s (SEHK: 327) Florida offices, we have serious concern for the operational integrity of both PagSeguro and StoneCo. We have been keeping an eye on the two companies for some time, but recent developments have prompted us to publish this brief note.

Both PagSeguro and StoneCo are dependent on Chinese company PAX Global Technology Limited for their POS terminals.

Yesterday, October 26, 2021, PAX Technology’s Florida locations were raided by the FBI with sources reporting that the machines have been used as malware droppers and command-and-control locations. We expect PagSeguro to be subject to significant regulatory action and scrutiny, with the clear possibility of legal action against the company by various counterparties.

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