NEW YORK (TheStreet) -- Oi SA (OIBR) shares dropped 6% to $1.41 in trading Wednesday following the news that the Brazilian Securities and Exchange Commission (CVM) had reached a decision on the shareholder complaints that it was investigating.
Oi SA minority shareholders had filed a complaint with the commission taking issue with the Brazilian telecom company's proposed merger with Portugal Telecom. They had sought to stop a March 27 shareholders meeting where the terms of the deal are expected to be discussed. The CVM ruled that the shareholder meeting could go forward despite the complaints.
The shareholders are opposed to the deal because they say that Portugal Telecom's stock is overvalued and therefore their shares would be diluted in the $3.5 billion deal.
TheStreet Ratings team rates OI SA as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate OI SA (OIBR) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself."