At what price BP?

Anyone reading this thread knows I have expressed the consistent opinion that BP's scale is such that their ability to withstand enormous losses on this disaster would not even wipe out the equity of their US subsidiary.

While that may still be true I have never seen management this tone deaf in my life. The politics do count here and their inability to express themselves in a way that benefits them comes with a high price tag.

From this point on I base all my assumptions that their US subsidiary might well end up having a value at or near zero. That lops off about a third of BP's equity.
 
Quote from Swan Noir:

Anyone reading this thread knows I have expressed the consistent opinion that BP's scale is such that their ability to withstand enormous losses on this disaster would not even wipe out the equity of their US subsidiary.

While that may still be true I have never seen management this tone deaf in my life. The politics do count here and their inability to express themselves in a way that benefits them comes with a high price tag.

From this point on I base all my assumptions that their US subsidiary might well end up having a value at or near zero. That lops off about a third of BP's equity.
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Hi Swan,

I couldn't agree with you more. Also the take it one step at a time attitude has cost the company perhaps weeks in moving to where they will be in a couple of weeks.

I didn't stop today but I very much slowed down my agrressive long with BP and I am moving puts that I am writing to the OCT month while closing out much of the JUL and some Jun. On top of that I let two Jun calls OTM hold overnight while I would normally close out as they are both green and at trget. Friday I closed out some Near OTM calls into the close thinking any progress made over the weekend would continue to push it higher. The only progress seen so far is the non stoppable way that they go out this so slow. If it was not for the huge IV I would not be selling any near term puts at all as it appears pretty clear that it is going to be a while before any progress is made. It looks like if we are "lucky" the oil spill rate will diminish around the end of the month which most likely will continue to put pressure on the stock.

As Friday approaches I would not be surprised to see the price settle in around 30 as I would guess (but have not run the numbers yet) that is the sweet spot for the market makers or if they are lucky higher.

I will be looking to sell slowly the October OTM puts and also short Jun calls tomorrow and through the week.
 
I disagree with you all. BP is a buy at 5 bucks if it does not fall into Chapter 7 or government receivership.

The claims against the company seems like a bottomless pit and they will lose ALL of their deepwater drilling permits and be permanently banned from the region.

Did you know there are towns that do not have one drop of oil on their beaches making claims against BP? The claims will get out of control to the point where a government bailout will be required much like they did with Citibank.

Whoever has a claim will be paid no matter how outlandish it might seem.

I point my bat to the stars and stand by my claim that BP is a buy at 5 bucks.
 
The guy who said that BP is "tone deaf" is an ignorant fool. The last few times in history this has happened then it took about 9-12 months to completely seal the wells. Well blowouts have happened before.

How is BP "tone deaf"? They have reacted very quickly and are doing whatever they can. Unfortunately, there is no technology on this earth that will solve this problem quickly. Even if it were 100 years from now and BP had 3 times the manpower/resources, then it would still take 9-12 months to completely seal that well.

What do you want BP to do? Come out and hold your hand? Give you some tissue? No one is going to do that for you. Its a disaster and they are doing what they can.

Its because of people like you that simply "can't wait" and expect these companies to hand out Kleenex to the masses is the reason why our energy security is at stake. You don't realize that the Chinese are drilling right now in the gulf taking advantage of the moratorium. You dont realize the leases on the rigs will go to hostile nations and these rigs will never come back. You dont realize that hundreds of thousands of employees depend upon deepwater drilling for their livelihood. What do you say to them and their families? Fuck em?

My suggestion to you, if you dont want more of our energy resources going to other nations and dont want these southern towns turning into ghost towns, is to get tough. Dont worry about who is going to hand you that Kleenex.
 
I want the CEO to realize that when 11 men have died -- possibly as a result of his firms negligence -- that saying "I want my life back" might be just, as the English are fond of saying, "a tad inappropriate".

To me that is "tone deaf".

Quote from retaildaytrader:

The guy who said that BP is "tone deaf" is an ignorant fool.

.....

What do you want BP to do?
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Even God Himself hates BP :) :

NEW ORLEANS – A bolt of lightning struck the ship capturing oil from the blown-out BP well in the Gulf of Mexico on Tuesday, igniting a fire that halted containment efforts in another setback for the embattled company in its nearly two-month struggle to stop the spill, the company said.

The fire was quickly extinguished and no one was injured. BP said it hopes to resume containing oil from the well sometime Tuesday afternoon.


http://news.yahoo.com/s/ap/20100615/ap_on_bi_ge/us_gulf_oil_spill_fire
 
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