BP Considering Suspension of Dividends

[NolaMan]

Suspending dividends is different than a drop in share price.

Dividends get cut all the time, and increased all the time. They are never constant.

 

[NolaMan]

Do so at your own risk. According to Jim Cramer, for what its worth, BP is toast.

BP Is Toast! - TheStreet

I personally think they will survive.. It is in the government's interest to prevent a bankruptcy filing, and in such a case the shareholders will not be all that terribly off. (depending on when you get in)

Remember all the banks that should have been toast? AIG for example, all indication are they should have failed, but stock bottomed around $8, government stepped in to prevent bankruptcy, and it rocketed back up to $50.

I would be willing to take the risk on BP around $20-21 a share. Not a huge risk, but something.

 

[upsideguy]

Preventing bankruptcy of key banks and financial institutions at a time of economic crisis (largely a loss of confidence) is an all together different matter than preventing the bankruptcy of a foreign based energy company. Neither Enron nor BP are too big to fail.

 

[NolaMan]

Preventing bankruptcy of key banks and financial institutions at a time of economic crisis (largely a loss of confidence) is an all together different matter than preventing the bankruptcy of a foreign based energy company. Neither Enron nor BP are too big to fail.

As I said, I would be willing to more or less take the chance that the government will take steps to ensure their survival should it actually come to that. I don't think it actually will, but its a chance I would take, at least with a limited amount of money.

 

[obvious Child]

I don't think they can really be compared. The Valdez was spilled in a mostly remote area, and while it was devastating, it did not really impact (nor shut down) a multi-billion dollar industry across multiple states like the BP spill has.

Perhaps so, but compared to what the original bill was, Exxon got little more then a proverbial hand slap.

Ultimately, I think BP's cost and fines will be much higher than we saw with Exxon, even after all the appeals.

I don't doubt that, but the estimates people are giving seem ridiculous in Exxon's context. Exxon actually paid a little more then half a billion after years of appeals. Even if BP's actual fines are $10 billion, spreading that level of pain over years of appeals effectively renders the total outflow relatively minor.

 

[obvious Child]

I would be willing to take the risk on BP around $20-21 a share. Not a huge risk, but something.

Which is what a lot of investors are thinking. I suspect BP's share price will fall to a certain point at which value investors will clamor all in causing a significent rise in price which will then be followed by growth and the rest of the lot. Honestly, I don't see BP have problems here aside from serious problems getting liscences from the US government in the future. I bet they are going to start lobbying harder for Republicans come 2012.