Monday, June 14, 2010
Taking BP
Guys it's clear British Petroleum is f-ed. When Exxon pissed the bed in '89, their company image suffered, but they rebounded and are now considered an industry leader. As we approach our next meeting, monitor BP trading. They've fallen 50% from $60.48 to $31.48. Sure consumers are boycotting their 13,000 gas stations, but those are franchises owned by independents and have lesser effect on the finances of the parent company. I know this crosses the investment ethics line like Philip Morris, but if our goal is ultimately to make money, we should consider it. Besides, when the leaky pipe is plugged, there is little doubt Wall Street will start shorting the bleep out of it. So are you in- or out?
Subscribe to:
Post Comments (Atom)
4 comments:
I was thinking the same thing late last week, but didn't get time to bring it up. I am on board! I even looked how Exxon rebounded from their spill in 1989.
It is a longer term play, but i am highly confident, eventually they will rebound, just like Exxon did. The question is, how low will it go? I think it might drop lower than where it is currently at due to not being able to stop the problem. I am in, but think we should buy it lower than where it is now. Any thoughts on how far it will fall? Or do you think it has hit the bottom?
Also, whats up with the PIKE house investment? Are we going to get involved? Last we checked, the offer was still available to us. Thoughts on that?
I'm short on BP and think it will continue to fall. They have no real plan and their expenses pile up every day. Obama asked for a $10B escrow account and that number will probably grow. Damages so far are at 2B and that number is probably going to triple. Investor confidence is falling and while they have oil reserves as assets, this is worse than the exxon valdez spill and will have longer lasting effects.
I wouldn't be surprised if there was a bankruptcy and a purchase by Exxon after that was declared but this stock is too risky to consider buying in my opinion until they get their act together.
I agree 100% with Pat. Aside from the ethical issues associated with investing in a company that will likely destroy the fishing economy in the Gulf coast - they are FAR from hitting rock bottom.
This oil spill is the most devastating oil spill in history and the effects and clean-up are going to last much longer the Valdez spill. BP is going to have lawsuits and clean-up costs up the wazoo. As profitable as they are, there is no way they will recover from this without bankruptcy abd a buy-out. Tax payers are not going to accept a big oil bailout - Obama will get racked over the coals if he passes something like that.
They haven't even plugged the leak yet! Way to risky a buy in my book.
We should focus on companies that specialize in environmental clean-up - rather than the companies doing the polluting.
here's an article just released this morning
http://commoditysurge.blogspot.com/2010/06/bank-of-america-nysebac-limits-bp.html
Post a Comment