Oi’s Stock Soars: Telecom Giant’s Shares Double in Value Amid Regulatory Shift

Oi, the Brazilian telecommunications company, saw its stock price skyrocket on Monday. The company’s shares more than doubled in value, leading gains on the B3 stock exchange. This sudden surge caught the attention of investors and market watchers alike.

The dramatic rise in Oi’s stock price began as soon as the market opened. Within the first hour of trading, the share value had already increased by one Brazilian real. This rapid ascent triggered multiple trading halts due to excessive volatility.

By midday, Oi’s ordinary shares (OIBR3) had climbed 97%, reaching 1.97 reais. At its peak, the stock touched 2.19 reais, marking a 119% increase from the previous close. These figures underscore the magnitude of the day’s movement.

The catalyst for this remarkable surge was a regulatory decision. Brazil’s National Telecommunications Agency (Anatel) approved a change in Oi’s fixed-line telephone service regime. This shift moves the company from a concession model to an authorization model.

Oi’s Stock Soars: Telecom Giant’s Shares Double in Value Amid Regulatory Shift. (Photo Internet reproduction)

Alexandre Freire, the case’s rapporteur, explained the rationale behind the decision. He emphasized Anatel’s commitment to ensuring a smooth transition. The new model aims to be sustainable for both telecom companies and consumers in the long run.

Oi, currently undergoing judicial reorganization, views this change as crucial. The company stated that this approval marks the final step needed to transition fixed-line telephony from public to private regime. This shift is seen as vital for Oi’s operational viability.

The company plans to resume arbitration proceedings following this development. Through this process, Oi seeks compensation for historical imbalances in its concession. The outcome could potentially benefit all stakeholders involved.

Oi’s Stock Soars: Telecom Giant’s Shares Double in Value Amid Regulatory Shift

Market analysts from Bradesco BBI and Ágora Investimentos shared their perspectives on the news. They noted that while the decision was largely expected, it marks the end of Oi’s migration process. The analysts anticipate a similar approval for Telefônica Vivo’s fixed-line concession in São Paulo.

The analysts predict that Vivo’s process will likely be simpler and quicker than Oi’s. They estimate that this migration could lead to reduced operating expenses and capital expenditures. Additionally, it may accelerate the sale of concession assets.

In a separate development, Oi disclosed a change in its shareholder composition. Ashmore Investment funds now hold approximately 31.3 million ordinary shares of the company. This acquisition gives Ashmore a 9.48% stake in Oi.

The company clarified that Ashmore’s investment does not aim to alter Oi’s control structure or administrative setup. Any changes would only occur within the framework of the Judicial Reorganization Plan.