Magazine Luiza SA

“Magazine Luiza earns below its cost of capital, carries R$8-10B in net debt with near-zero free cash flow, faces structural competitive displacement from Mercado Livre and Shopee, and has management credibility compromised by a debt-fueled acquisition spree that destroyed 90%+ of market value — the business survives but does not compound, and the probability of permanent capital loss is high enough to warrant a full avoid for any long-term investor.”