At what price BP?
- Thread starter Swan Noir
- Start date
Actually, they have spent almost the billion for far ($950M)
"Experts" estimate the spill cost as $5 Billion:
http://www.bestgrowthstock.com/stoc...narios-the-future-for-bp-after-the-oil-spill/
If the "experts" are correct and we knew the bill would come in at $5B this would be the buy of the decade. Its seeing a much larger bill with many restrictions put on the company by the govt that has the price under pressure IMHO.
After that big run up I scaled back a ways. the news sending the stock lower that the oil is going to go up the east coast gave me one more kick at the can to load up. I didn't quite make 2K on it today like I wanted to (so far) but it was still very good.
the options have monster IV so they may be a much less risky choice than buying the stock outright. either covered call or naked put. The puts or at least some of them have huge volume so its easy to get in and out without getting killed in the spread.
Feds are only billing BP for $69 million so far.
http://news.yahoo.com/s/ap/20100603/ap_on_bi_ge/us_gulf_oil_spill_washington
BP makes $21 billion in profit per year. Thats $1.75 billion in PROFIT per month. So basically they are still making $800 million dollars per month even with the $950 million dollars per month they are spending on cleanup. Thats not chump change. No way they are going bankrupt. This time next year BP will be at $60.
Even if BP somehow incurs a huge charge, does anyone actually think they won't find a way to fight/defer/stretch it out? My guess is that any fees involving "real" money (billions and billions) as well as any lawsuits that are generated at the state or federal level are going to drag on forever.
Clean up is relatively cheap and will be paid fast. Plugging the hole is a little more expensive and will take many months. They first need to relieve the pressure by drilling more holes, then they will be able to cap the leak successfully. The lawsuits are what will be expensive to BP, but just like exxon valdez, they can tie it up in court over 15-20 years or so. (still not 100% sure that XOM paid those punitive damages even though they got reduced to 10 cents on the dollar by the courts and another 50%-75% when factoring in inflation). If BP gets sued, nobody will see a dime until 2025 or later.