Telefonica's stock drops amidst Venezuela's currency devaluation

Despite its strong presence in the Latin American telecom market, Telefonica is once again finding that Venezuela's devalued currency is having a negative effect on its stock price.

News of Venezuela's financial issues drove Telefonica's shares down 2.6 percent to $27 and just slightly over $27.1 as of 10:21 AM Madrid time today. Last Friday, Venezuela President Hugo Chavez devalued Venezuela's exchange rate for the bolivar and then set a 2.6 rate for importing food and medicine.

In May, Telefonica asked the Venezuelan government repatriate about $2 billion from its Venezuela unit. Generating over 6.3 percent in sales, Venezuela is Telefonica's second-largest revenue-generator in Latin America, trailing only Brazil.  

Regardless of the devaluation, Telefonica spokesman Miguel Angel Garzon said that the telco will reach its goal of $3.04 in earnings per share in 2010.

For more:
- Bloomberg has this article

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