In the past two months BP has lost 50% of its valuation dropping from around $60 in mid April and is about $32. In the same time Chevron and Exxon have only taken a 10% fall and Total and Shell only about 20% so to me it seems people are just very scared of BP due to the uncertainty over fixing this leak and have panicked and in the bear irrationally wiped $100bn off its value.
I have seen suggestions that BP will cut its dividend by up to 50% which has contributed to its fall in value however from what I have read it's liability from this disaster will be limited by law and considering it has nearly $7bn cash on hand (in addition to the cash held by other liable parties like Transocean and Halliburton) it would seem BP not be in a better position for dealing with the financial aspect of stopping the leak and cleaning it up.
Being an optimist I would almost be ready to take a long position and hold onto BP stock until it heads back towards the $60 it was trading at before the leak however I am well aware of people predicting a far more dire future for BP.
In the short term if they announce they will have to cut the dividend will the stock drop further or has it already been discounted to reflect this fear?
In the longer term if there is a strong short term movement against offshore drilling will this affect BP shares or will its operations in Venezuela, Canada, the North Sea, Europe and Asia serve to protect it against decreased productivity in the gulf region?
With regards to the suggestions that BP will go bankrupt and be taken over due to its liabilities which some have predicted will amount to tens of billions does anyone have any thoughts? Exxon after the Valdez disaster as we all know was in a similar situation but ultimately escaped without having to pay its liabilities in full and thrived and given that liability is also likely to be shared by Halliburton and Transocean are fears of bankruptcy an overreaction?
I am interested in hearing any thoughts on BP stock as along position at this current time.
Thanks,
Michael.
I have seen suggestions that BP will cut its dividend by up to 50% which has contributed to its fall in value however from what I have read it's liability from this disaster will be limited by law and considering it has nearly $7bn cash on hand (in addition to the cash held by other liable parties like Transocean and Halliburton) it would seem BP not be in a better position for dealing with the financial aspect of stopping the leak and cleaning it up.
Being an optimist I would almost be ready to take a long position and hold onto BP stock until it heads back towards the $60 it was trading at before the leak however I am well aware of people predicting a far more dire future for BP.
In the short term if they announce they will have to cut the dividend will the stock drop further or has it already been discounted to reflect this fear?
In the longer term if there is a strong short term movement against offshore drilling will this affect BP shares or will its operations in Venezuela, Canada, the North Sea, Europe and Asia serve to protect it against decreased productivity in the gulf region?
With regards to the suggestions that BP will go bankrupt and be taken over due to its liabilities which some have predicted will amount to tens of billions does anyone have any thoughts? Exxon after the Valdez disaster as we all know was in a similar situation but ultimately escaped without having to pay its liabilities in full and thrived and given that liability is also likely to be shared by Halliburton and Transocean are fears of bankruptcy an overreaction?
I am interested in hearing any thoughts on BP stock as along position at this current time.
Thanks,
Michael.
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