Several negatives seem to be at work here. First, there's concern deep water drilling is a lot more risky than previously thought. The risks are no greater now than before the BP disaster, but they have brought a whole new awareness to the situation. Secondly, there's concern about possible dilution caused by a secondary stock offering. PBR is and has always been controlled by the Brasilian government, and they can do pretty much whatever they want. However, I doubt that they want to destroy the value of a company that is enormously important to the country's economy. Short term, PBR could remain under some pressure, but I still see it as an excellent long term investment in the overall growth of Brasil. I'm not sure $45 is in the cards by year end, but I would expect to see it sometime next year. For the time being, enthusiasm for PBR seems to have waned considerably. It might be best to put together a basket of Brasilian stocks such as VALE, ITUB, GOL, etc., all of which I own personally.