m22au's journal

I believe EBR.B is the preferred in the NYSE

 

A good play here might actually be buying EBR's bonds. With the government owning 51% and the company being submissive to their demands, the company effectively has become a part of the federal government. I'm not sure how much their debt is yield but I suspect the yield has increased a lot after they said their EBITDA would tank as bond investors love to look at that to value bonds

Truth is these bonds are very close to be like government bonds

 

I agree that the bonds are similar to those of Freddie Mac and Fannie Mae - in theory a private company, but in practice a tool of the government. In fact given the 51% government ownership, it is more of a government tool than FRE / FNM (before their conservatorship).

I don't have a Bloomberg terminal, and because it's a Brazillian company I can't find out as much information about EBR bonds than I can about AMD bonds for example.

However EBR is on the watchlist as a possible big decliner in the months and years to come.

 

EBR bonds not tradable at IB. Says there is some kind of institutional restriction. ELEBRA is the symbol
Shame

 

thanks Daal

 

how are you playing EBR?Looking at the daily chart, stock looks oversold as hell. Too risky to short these types of setups for me unless there is a liquidity crisis

 

I agree - I have no position as yet. But given the 1 BRL price target and the operating losses that the company will incur as a result of the government's recent decision, I am looking to short it at a future date.

 

http://www.valor.com.br/brasil/2918408/uniao-pode-rever-parte-das-indenizacoes-diz-tolmasquim

Government might review financial compensation for utilities. I went long to bet on squeeze
Was way too slow, could have gotten in at 3.36 but waited till price reached 3.40s

 

EBR has a combination of daily chart oversold("Great new pattern"), positive news and analysts throwing the towel. I hope it reaches $4 so I can dump

 

Thanks for the update Daal regarding possible review of compensation. That's the problem with shorting these types of companies - the government can go in and change the rules at any time.