Why Oi SA (OIBR) Stock Is Down Today

NEW YORK (TheStreet) -- Oi SA  (OIBR) fell Tuesday after the largest Brazilian telecommunications telephone company priced a secondary public offering of its stock.

The company announced a global offering of 2,142,279,524 common shares, including 396,589,982 common shares in the form of American Depositary Shares. The offer also includes 4,284,559,049 preferred shares, including 828,881,795 preferred shares in the form of ADSs.

Oi SA offered the common shares at a price of R$2.17 a share and the preferred shares at R$2 a share. The company offered the common shares outside Brazil at a price of 97 cents per common ADS and preferred shares at 89.4 cents per preferred ADS.

The aggregate cash proceeds of the offering will total approximately $5.868 billion after underwriting discounts and commissions, before expenses.

The stock was down 15.38% to 88 cents at 10:15 a.m. on Tuesday.

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Separately, 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 a number of negative factors, 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 generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

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