SEC Company Response from MERCADOLIBRE INC (MELI) (CIK 0001099590) (MELI) — Jul 14, 2009
MERCADOLIBRE INC (MELI) (CIK 0001099590)
Date: July 14, 2009 · CIK: 0001099590 · Accession: 0000950123-09-022129
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-33647
Referenced dates: June 29, 2009, May 28, 2009
Letter
VIA EDGAR AND FACSIMILE United States Securities and Exchange Commission Division of Corporation Finance SEC Comment Letter for the Form 10-K for the Fiscal Year Ended December 31, 2008 filed on February 27, 2009 Forms 8-K filed on February 24, 2009 and May 6, 2009 File No. 001-33647
Dear Ms. Collins:
MercadoLibre, Inc. a Delaware corporation (the “Company,” “we” or “us”), is transmitting for filing its responses to the comments of the Staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “SEC”), with respect to the Company’s annual report on Form 10-K for the Fiscal Year Ended December 31, 2008 filed on February 27, 2009 and current reports on Form 8-K filed on February 24, 2009 and May 6, 2009 (File No. 001-33647), contained in your comment letter dated June 29, 2009.
For convenience of reference, each Staff comment contained in your June 29, 2009 comment letter is reprinted below in italics, numbered to correspond with the paragraph number assigned in your comment letter and is followed by the corresponding response of the Company.
Ms. Collins
July 14, 2009
Page 2
Form 10-K for the Fiscal Year Ended December 31, 2008
General
1.
We note that your counsel, on behalf of the Company, provided the acknowledgments we requested in our letter dated May 28, 2009. Please note that the representations should come directly from the company. In your next response, please provide the representation directly from the company.
Response: The Company hereby acknowledges that:
•
the Company is responsible for the adequacy and accuracy of the disclosure in the filing;
•
staff comments or changes to disclosure in response to staff comments do not foreclose the U.S. Securities and Exchange Commission (the “Commission”) from taking any action with respect to the filing; and
•
the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
Note 2. Summary of Significant Accounting Polices
Income and Asset Taxes, page F-17
2.
Your response to prior comment 7 indicates that you have not provided the required disclosures because you would have pursued an alternative tax planning strategy had the tax holiday not been in place. Although we understand that you may be able to implement these strategies, the disclosures in SAB Topic 11.C are required disclosures. Please confirm that in future filings you will provide the disclosures required by SAB Topic 11.C.
Response: In future filings, the Company will provide the disclosures required by SAB Topic 11.C.
Ms. Collins
July 14, 2009
Page 3
Note 17. Long Term Retention Plan, page F-50
3.
We note from your response to prior comment 10 that you do not believe paragraphs A240(b)(2), (c)(2), and (d) of SFAS 123(R) are applicable because the Company did not grant options. However, since the shares issued in connection with your long-term retention plan were not vested at their grant date, it appears that such paragraphs are applicable. In this regard, paragraphs A240(b), (c)(2), and (d) make reference to share units and paragraph A240(b)(2) makes reference to shares of nonvested stock. Therefore, tell us how you considered disclosing the information in these paragraphs or explain to us further why you do not believe they are applicable.
Response: In response to the Staff comment, the following table shows the requirements of the rule and our related response:
Disclosure Requirement
Company Response
Paragraph A240 (b) (2): The number and weighted-average grant-date fair value (or calculated value for a nonpublic entity that uses that method or intrinsic value for awards measured pursuant to paragraphs 24 and 25 of this Statement) of equity instruments not specified in paragraph A240(b)(1) (for example, shares of non-vested stock), for each of the following groups of equity instruments: (a) those non-vested at the beginning of the year, (b) those non-vested at the end of the year, and those (c) granted, (d) vested, or (e) forfeited during the year.
As disclosed in note 17 to our Financial Statements included in our Form 10-K for the Fiscal Year Ended December 31, 2008, the company has granted 21,591 shares under the long-term retention plan as of December 31, 2008. The grant-date fair market value was $36.8 for each share. All equity instruments were granted during 2008 and were non-vested at the end of the year. There were no vested or forfeited equity instruments related to the Long term retention plan during the year ended December 31, 2008. We considered all granted shares as non-vested because, as described in note 17, it is required that the employee stays in the Company at the payment date.
In future filings we will include the above mentioned information to meet the disclosure requirements of paragraph A240 (b) (2).
Ms. Collins
July 14, 2009
Page 4
Disclosure Requirement
Company Response
Paragraph A240 (c) (2): The total intrinsic value of options exercised (or share units converted), share-based liabilities paid, and the total fair value of shares vested during the year.
According to FAS 123(R), paragraph E1, the intrinsic value of a non-vested share may be described as an option on that share with an exercise price of zero. Thus, the fair value of a share is the same as the intrinsic value of that share. In note 13 to our Financial Statements included in our Form 10-K for the Fiscal Year Ended December 31, 2008, we included the fair value of our shares. In future filings, we will disclose the fair value of our shares in our Long Term Retention Plan note to our Financial Statements. (See the aggregate intrinsic value table included at the end of this letter for more detail)
Paragraph A240 (d): For fully vested share options (or share units) and share options expected to vest at the date of the latest statement of financial position:
(1) The number, weighted-average exercise price (or conversion ratio), aggregate intrinsic value (except for nonpublic entities), and weighted average remaining contractual term of options (or share units) outstanding.
(2) The number, weighted-average exercise price (or conversion ratio), aggregate intrinsic value (except for nonpublic entities), and weighted average remaining contractual term of options (or share units) currently exercisable (or convertible).
As of December 31, 2008, the Company did not have any fully vested share as disclosed in the response to Paragraph A240 (b) (2).
As of December 31, 2008, the remaining contractual term of shares granted was 3.25 years (remaining vesting period). The aggregate intrinsic value has been included in the response to the disclosure requirements of paragraph A240 (b) (2) above.
In future filings we will include the above mentioned information to meet the disclosure requirements of paragraph A240 (d).
The following table discloses the aggregate intrinsic value as of December 31, 2008 and March 31, 2009:
Ms. Collins
July 14, 2009
Page 5
March 31,
December 31,
Number of shares granted
21,591
21,591
Closing price of share
18.55
16.41
Weighted average exercise price
—
—
Intrinsic value
18.55
16.41
Aggregate intrinsic value
400,513
354,308
If you have any questions or comments regarding the foregoing, please contact our General Counsel, Jacobo Cohen Imach at 011 5411 5352 8030, jcimach@mercadolibre.com. We look forward to working with you on these matters.
Sincerely,
/s/ Hernán Kazah
Show Raw Text
CORRESP
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filename1.htm
Correspondence
MERCADO LIBRE, INC
TRONADOR 4890, 8TH FLOOR
BUENOS AIRES, C1430DNN
ARGENTINA
TEL
011• 5411 • 5352 • 8000
FAX
011• 5411 • 4545 • 4744 /
011• 5411 • 5550 • 8719
HERNAN KAZAH.
DIRECT DIAL: 011-5411-5352-8004
EMAIL: hernan@mercadolibre.com
July 14, 2009
VIA EDGAR AND FACSIMILE
Ms. Kathleen Collins
Accounting Branch Chief
United States Securities and Exchange Commission
Division of Corporation Finance
One Station Place
100 F Street, N.E.
Washington, D.C. 20549-4561
Re:
MercadoLibre, Inc.
SEC Comment Letter for the Form 10-K for the Fiscal
Year Ended December 31, 2008 filed on February 27, 2009
Forms 8-K filed on February 24, 2009 and May 6, 2009
File No. 001-33647
Dear Ms. Collins:
MercadoLibre, Inc. a Delaware corporation (the “Company,” “we” or “us”), is transmitting for filing
its responses to the comments of the Staff of the Division of Corporation Finance (the “Staff”) of
the Securities and Exchange Commission (the “SEC”), with respect to the Company’s annual report on
Form 10-K for the Fiscal Year Ended December 31, 2008 filed on February 27, 2009 and current
reports on Form 8-K filed on February 24, 2009 and May 6, 2009 (File No. 001-33647), contained in
your comment letter dated June 29, 2009.
For convenience of reference, each Staff comment contained in your June 29, 2009 comment letter is
reprinted below in italics, numbered to correspond with the paragraph number assigned in your
comment letter and is followed by the corresponding response of the Company.
Ms. Collins
July 14, 2009
Page 2
Form 10-K for the Fiscal Year Ended December 31, 2008
General
1.
We note that your counsel, on behalf of the Company, provided the acknowledgments we
requested in our letter dated May 28, 2009. Please note that the representations should come
directly from the company. In your next response, please provide the representation directly
from the company.
Response: The Company hereby acknowledges that:
•
the Company is responsible for the adequacy and accuracy of the disclosure in the
filing;
•
staff comments or changes to disclosure in response to staff comments do not foreclose
the U.S. Securities and Exchange Commission (the “Commission”) from taking any action with
respect to the filing; and
•
the Company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.
Note 2. Summary of Significant Accounting Polices
Income and Asset Taxes, page F-17
2.
Your response to prior comment 7 indicates that you have not provided the required
disclosures because you would have pursued an alternative tax planning strategy had the tax
holiday not been in place. Although we understand that you may be able to implement these
strategies, the disclosures in SAB Topic 11.C are required disclosures. Please confirm that in
future filings you will provide the disclosures required by SAB Topic 11.C.
Response: In future filings, the Company will provide the disclosures required by SAB Topic
11.C.
Ms. Collins
July 14, 2009
Page 3
Note 17. Long Term Retention Plan, page F-50
3.
We note from your response to prior comment 10 that you do not believe paragraphs A240(b)(2),
(c)(2), and (d) of SFAS 123(R) are applicable because the Company did not grant options.
However, since the shares issued in connection with your long-term retention plan were not
vested at their grant date, it appears that such paragraphs are applicable. In this regard,
paragraphs A240(b), (c)(2), and (d) make reference to share units and paragraph A240(b)(2)
makes reference to shares of nonvested stock. Therefore, tell us how you considered disclosing
the information in these paragraphs or explain to us further why you do not believe they are
applicable.
Response: In response to the Staff comment, the following table shows the requirements of
the rule and our related response:
Disclosure Requirement
Company Response
Paragraph A240 (b) (2): The number
and weighted-average grant-date fair
value (or calculated value for a
nonpublic entity that uses that
method or intrinsic value for awards
measured pursuant to paragraphs 24
and 25 of this Statement) of equity
instruments not specified in
paragraph A240(b)(1) (for example,
shares of non-vested stock), for
each of the following groups of
equity instruments: (a) those
non-vested at the beginning of the
year, (b) those non-vested at the
end of the year, and those (c)
granted, (d) vested, or (e)
forfeited during the year.
As disclosed in note 17 to
our Financial Statements
included in our Form 10-K
for the Fiscal Year Ended
December 31, 2008, the
company has granted 21,591
shares under the long-term
retention plan as of
December 31, 2008. The
grant-date fair market
value was $36.8 for each
share. All equity
instruments were granted
during 2008 and were
non-vested at the end of
the year. There were no
vested or forfeited equity
instruments related to the
Long term retention plan
during the year ended
December 31, 2008. We
considered all granted
shares as non-vested
because, as described in
note 17, it is required
that the employee stays in
the Company at the payment
date.
In future filings we will
include the above mentioned
information to meet the
disclosure requirements of
paragraph A240 (b) (2).
Ms. Collins
July 14, 2009
Page 4
Disclosure Requirement
Company Response
Paragraph A240 (c) (2): The total
intrinsic value of options exercised
(or share units converted),
share-based liabilities paid, and
the total fair value of shares
vested during the year.
According to FAS 123(R),
paragraph E1, the intrinsic
value of a non-vested share
may be described as an
option on that share with
an exercise price of zero.
Thus, the fair value of a
share is the same as the
intrinsic value of that
share. In note 13 to our
Financial Statements
included in our Form 10-K
for the Fiscal Year Ended
December 31, 2008, we
included the fair value of
our shares. In future
filings, we will disclose
the fair value of our
shares in our Long Term
Retention Plan note to our
Financial Statements. (See
the aggregate intrinsic
value table included at the
end of this letter for more
detail)
Paragraph A240 (d): For fully vested
share options (or share units) and
share options expected to vest at
the date of the latest statement of
financial position:
(1) The number, weighted-average
exercise price (or conversion
ratio), aggregate intrinsic value
(except for nonpublic entities), and
weighted average remaining
contractual term of options (or
share units) outstanding.
(2) The number, weighted-average
exercise price (or conversion
ratio), aggregate intrinsic value
(except for nonpublic entities), and
weighted average remaining
contractual term of options (or
share units) currently
exercisable (or convertible).
As of December 31, 2008,
the Company did not have
any fully vested share as
disclosed in the response
to Paragraph A240 (b) (2).
As of December 31, 2008,
the remaining contractual
term of shares granted was
3.25 years (remaining
vesting period). The
aggregate intrinsic value
has been included in the
response to the disclosure
requirements of paragraph A240 (b) (2) above.
In future filings we will
include the above mentioned
information to meet the
disclosure requirements of
paragraph A240 (d).
The following table discloses the aggregate intrinsic value as of December 31, 2008 and March 31,
2009:
Ms. Collins
July 14, 2009
Page 5
March 31,
December 31,
2009
2008
Number of shares granted
21,591
21,591
Closing price of share
18.55
16.41
Weighted average exercise price
—
—
Intrinsic value
18.55
16.41
Aggregate intrinsic value
400,513
354,308
If you have any questions or comments regarding the foregoing, please contact our General Counsel,
Jacobo Cohen Imach at 011 5411 5352 8030, jcimach@mercadolibre.com. We look forward to working
with you on these matters.
Sincerely,
/s/ Hernán Kazah
Hernán Kazah
cc:
Christine Davis
Melissa Feider
Edward W. Elmore Jr.
Jacobo Cohen Imach
Jan Woo
Katherine Wray