Trading restriction halts Portugal Telecom slide
LISBON, Portugal (AP) — A ban on the short-selling of Portugal Telecom shares helped the stock rebound following a plunge that analysts say leaves it vulnerable to a takeover bid.
The shares spiked 11 percent at 1.09 euro Thursday in Lisbon, ending days of losses, which saw the company’s market value slump to below 900 million euros ($1.14 billion). The company has lost over 60 percent of its value in recent months.
The troubles at Portugal Telecom SGPS SA began when it revealed it lent around 900 million euros to Rioforte, a holding company that was part of the Espirito Santo Group. Rioforte went bankrupt amid the collapse of the Espirito Santo family business empire, and Portugal Telecom is unlikely to recoup its money.
In short-selling, investors bet that a share price will fall.