Petrobras Spooks Traders with Threat to Extraordinary Dividends
Brazilian state-controlled oil giant Petrobras has spooked traders with its threat to suspend extraordinary dividends for the foreseeable future. The company’s shares have dropped by more than 10% since the announcement, wiping out billions of dollars in market value.
Petrobras’ Dividend Policy
Petrobras has long been a favorite among investors due to its generous dividend policy. The company has paid out extraordinary dividends since 2014, with the most recent payment coming in 2019. The dividends have been a major source of income for investors, and have helped to buoy the company’s stock price.
Petrobras’ Financial Struggles
However, Petrobras has been struggling financially in recent years. The company has been hit hard by the global oil price slump, and has been forced to cut costs and reduce its workforce. The company has also been plagued by corruption scandals, which have further eroded investor confidence.
Petrobras’ Recent Announcement
In an effort to shore up its finances, Petrobras recently announced that it would suspend extraordinary dividends for the foreseeable future. The company said that it would focus on reducing debt and improving its financial position. The announcement sent shockwaves through the markets, and sent Petrobras’ shares tumbling.
Investor Reaction
Investors were quick to react to the news, with many selling off their Petrobras shares. The company’s stock price dropped by more than 10%, wiping out billions of dollars in market value. The sell-off was exacerbated by the fact that Petrobras had been one of the most popular stocks on the Brazilian stock exchange.
The Impact on Petrobras
The suspension of extraordinary dividends is likely to have a significant impact on Petrobras. The company will no longer be able to rely on the income from the dividends, and will have to find other sources of revenue. This could mean that the company will have to cut costs even further, or take on more debt.
The Future of Petrobras
It remains to be seen how Petrobras will fare in the future. The company is facing a difficult situation, and it is unclear how it will be able to turn things around. The suspension of extraordinary dividends is likely to have a negative impact on the company’s finances, and it could take some time for the company to recover.