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2014's Worst-Performing Stock We Cover: Oi

The Brazilian telecom conglomerate's shares were down 80% last year, but the company could still benefit from consolidation in the industry and some secular trends.

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Peter Wahlstrom: Oi, the no-moat Brazilian telecom conglomerate, was the worst-performing stock [we cover] in 2014. Shares were down 80% and were reflective of a couple of major uncertainties that investors have.

First, the company effectively has a failed merger with Portugal Telecom (PT), and while the merger vote was approved in May 2014 and Portuguese assets and debt were transferred to Oi, the merger was never completed. In short, this is because Portugal Telecom had another investment in another firm that went bankrupt. And now Oi is in limbo, since every time a major move in Portuguese assets is expected, the Portugal Telecom shareholders need to vote.

Peter Wahlstrom does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.