Paul Singer's Elliott Management Profits Off Portugal Telecom Short

Short interest in Portugal Telecom, SGPS (ADR) (NYSE:PT) (ELI:PTC) increased by nearly 40% from the beginning of July to the mid of August. The telecom company was shaken by the corruption scandals in Portuguese group, Espirito Santo International, which holds a 10% stake in Portugal Telecom.

Portugal Telecom is one of the creditors of Rioforte, a financing arm of ESI. PT held bonds worth 900 million euros on which Rioforte defaulted last month. As bondholders were left unpaid and spreads widened, shares of Portugal Telecom were punished in the market. PT is down 42% since July and nearly 50% for the year.

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