Oi S.A. (OIBR) Stock Plunges Today After Shareholder Compensation Policy Cancellation

NEW YORK (TheStreet) -- Shares of Oi S.A.  (OIBR) plunged 10.43% to $1.89 in late morning trading Friday after the Brazilian telecommunications company canceled its shareholder compensation policy.

OIBR announced to its shareholders and the public its board of directors had approved the cancellation of the shareholder compensation policy for the fiscal years 2013 through 2016. The company had previously disclosed the policy on August 13, 2013.

The stock surged last week after the Central Bank of Brazil increased its interest rate by 50 basis points to 12.25%, the highest level since August 2011.

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More than 3 million shares had changed hands as of 11:53 a.m., compared to the daily average volume of 2,273,270.

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 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, unimpressive growth in net income, generally high debt management risk, disappointing return on equity and weak operating cash flow."

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