BP has already suffered as much as they are going to suffer

[Indy Lurker]

It's simple math.

Their stock price has fallen from $60 a share to $34 a share. This represents a loss of $80 Billion. It may fall a little more in the short term, but it will rebound.

Estimates for the cleanup and legal fees are $40 Billion, and that's on the high side, and wouldn't be all paid out for many years.

If this estimate is right, BP stock should be at least $40-42 a share. If cleanup costs them less, their stock should be trading even higher.

This means that as the actual damage and costs become known we will see the stock price rise even as record fines and payouts occur.

Individuals within the company may suffer more if they go to jail, but the company as a whole has already hit bottom, or very close.

[Donnachaidh]

1. yeah, and monkeys will fly out of Hayward's ass

you really think they've hit bottom now? :wow: They haven't even capped the bloody thing yet. Odds are good that BP is going to go belly-up, with the massive cleanup they have already stated they will do.

Sorry, but any boob who buys BP stock in the future would have gotten better use out of their money using it as toilet paper. It would certainly be less harmful to the ecology than BP's *product*.

[MannyGoldstein]

2. It'll Cost Far More Than $40 Billion To Make Everyone Whole

But BP won't have to pay it, so in the end I agree with you.

[aquart]

3. Well, that's utterly depressing. Thanks so much.

[TexasObserver]

4. That's a terribly flawed analysis and is incorrect.

The value of BP's stock only indicates the aggregate value at current market rates that the market investors place on the company. Your version of how it defines the value of BP is simply incorrect. BP's value is based upon it being an operating company that has more assets than liabilities. Assets - Liabilities = Equity. That's the value of the company, irrespective of what the stock is selling for on a given day.

On April 30th, one of our members who said what you said (but said it much better) invested in BP at $52 a share, giving exactly the same rationale you gave. BP is around 36 now, less than six weeks later. That's a real loss, and the loss is to the stockholder with the stock, not BP.

BP's worth is its assets minus its liabilities, and the value of its assets do not change simply because its stock price changes. The price of the stock reflects the risks and gains of investors, not BP. The investors are losing money over BP's stock price crash. BP is losing money from the gusher and all the damages that flow from it.

If you really believe what you say, you should be buying all the BP stock you can get your hands on. According to you, it's worth far more than its current price.

As far as your statement that BP has hit bottom or is close, that's utter nonsense and without any rational basis. BP could go under because of this, and anyone holding BP stock could end up getting NOTHING for it. Their liabilities will likely double or triple before the flow is seriously attenuated.

[TexasObserver]

5. Update: BP stock is below $30 a share today.

It's dropped another $4 a share since your post.

As I have consistently said to anyone who will listen: get the hell away from BP stock.