Shares of AGI Inc. tumbled 8.3% following the Brazilian fintech's $240 million US initial public offering, which was downsized on Tuesday. The offering price and final size were reduced from initial targets, signaling weaker-than-expected investor demand for the Latin American fintech's debut on US markets.

AGI, a Brazilian payments and financial services company, had been expected to raise more capital at a higher valuation. The downsized IPO suggests investors are becoming more selective about fintech valuations amid broader market uncertainty. Brazilian fintechs have seen mixed reception in US markets, with some struggling to maintain post-IPO momentum.

The sharp decline in AGI's stock price reflects the challenges facing emerging market fintech companies seeking to list in the US. With the IPO priced below initial expectations, the company will have less capital to fund expansion plans in Brazil's competitive digital payments sector.