President Hugo Chavez says he will nationalize the Venezuelan telecom CANTV , which potentially makes the stock worth next to nothing. This is Venezuela's biggest telecom and trades at the NYSE unders symbol VNT. The stock was halted, down 14% right after the announcement was made at about 2:50 pm.
This is complicated because Verizon owns about 28% of the company and was supposed to sell their stake to America Movil and Telmex , both controlled by Mexican billionaire Carlos Slim. Investors were waiting for a nod from Chavez that would allow the deal to go through.
It may not stop here. Chavez has indicated he plans to nationalize the entire electricy and telecom industries.
These developments are a surprise; some are already saying that this could cause investors globally to finally re-evaluate historically-tight emerging market risk premiums. Others say the concerns are overblown.