Portugal Telecom has recorded the largest weekly drop in its share price ever.
The 28% plunge in value of the former money making state monopoly was spurred on by the announcement of the cancellation of dividends to Oi's shareholders.
PT also is likely to incur a fine of between €25,000 and €5 million imposed by the market regulator which did not help market sentiment.
The 28.38% drop in PT's value was the biggest weekly fall since the company first was listed on the Lisbon stock exchange in 1995. One share was worth 63.1 cents at the close of trading today. In 2009 the shares were trading at an average of €8.52
There was poor news in Brazil also as shares in Oi, which still owns 39% of Portugal Telecom, fell 7.53% today on the Sao Paulo stock exchange ending a week where the value dropped 26.39% in a week and it sacked another 120 call centre workers in Lisbon bringing the total number to 290 as the facility is wound down.
The catastrophic fall in share price happened after the management of Oi yesterday announced the cancellation of the agreed dividend policy. The current agreement provided for the distribution of 500 million reais over 2014, 2015 and 2016.
The probable fine from the Portuguese Securities Market Regulator is based on the accusation that PT did not provide "complete, accurate, timely, clear, objective and lawful" information with regard to financial investments that PT signed with Espírito Santo Group offshoot Rioforte.
According to an audit by PwC, Portugal Telecom is likely to be fund at fault when the regulator has finished mulling over the auditor’s findings.
The worst week ever for PT and OI started off with the announcement that Oi shareholders had given the green light to the sale of PT Portugal to Altice for €7.4 billion.
The Espírito Santo conglomerate is a major shareholder in PT and its own actions have contributed to the shredding of shareholder value.
