As the days go by folks who are good at making projections and calculations are coming to the realization that no company on earth is big enough to absorb the costs of making everything good again and still remain solvent. This assumes that the company in question has been doing everything right and by the book all along. When it finally surfaces that BP has been lying, and cheating all along, then everyone in the world will know what BP has known all along; that there really is no reason or purpose for BP to throw itself fully into this effort because it knows that no matter what, it is not going to survive as an ongoing concern.
Below is a chart showing the BP stock price over the past 3 months or so. The stock has been cut in half.
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BP knows that sooner or later information is going to come out that will ensure that the stock price pretty much will go to zero or thereabout. It is in BP's best interest to play the game and put on decent show in order to buy time. The powers-that-be in the upper management layers of BP need time right now. They need time to do what you would do if you opened up a little grocery store on the wrong side of town and realized that your business is simply not going to make it. You would come in every day and sell everything on the shelves down to bare walls and generally try to liquidate the fixed assets that you could before you turn out those lights for the last time and go home.
BP is basically going through the motions of pretending to care about the gulf, the wildlife in it, and the people who live in that region right now. What they really care about is getting the best possible price in a takeover or liquidation. They know that their brand is destroyed and that they have little chance of raising money from investors when needed, and they know that there is no hope in ever booking any sales revenue to the bottom line because of fines, penalties and judgements that will go on for decades to come. BP knows that there is no point in being a good corporate citizen anymore because they know that no matter how hard they work they will not obtain any credit, and they know that they deserve none because of the way they acted all along, all these years.
The reason that the stock price is going down everyday is because the market knows that the game is over. The US government may or may not seize their assets, or they may end up in receivership or they may end up being liquidated. The shareholder's equity has been squandered. At the present time the only asset that BP has is time. They want to buy time.
The longer this takes to play out, the more time upper management has to work on their exit strategy or fashion their golden parachutes. They want to secure their own futures first and then when they are just about ready to turn the lights out for the last time, they will let us know. They will inform us that they are sorry, but they have just learned that they are not able to meet all of their obligations in connection with this matter because for some reason much of their assets that they have been reporting all this time just now seem to be in a much less liquid form. Oops!
BP is done, and it only remains to be seen how much poison they were able to inject into our political system all along and cause our law givers to drag their heels in pursuit of justice.
The BP Rap sheet:
In two separate disasters prior to the Gulf oil rig explosion, 30 BP workers have been killed, and more than 200 seriously injured.
In the last five years, investigators found, BP has admitted to breaking U.S. environmental and safety laws and committing outright fraud. BP paid $373 million in fines to avoid prosecution.
BP's safety violations far outstrip its fellow oil companies. According to the Center for Public Integrity, in the last three years, BP refineries in Ohio and Texas have accounted for 97 percent of the "egregious, willful" violations handed out by the Occupational Safety and Health Administration (OSHA).
The violations are determined when an employer demonstrated either an "intentional disregard for the requirements of the [law], or showed plain indifference to employee safety and health."
OSHA statistics show BP ran up 760 "egregious, willful" safety violations, while Sunoco and Conoco-Phillips each had eight, Citgo had two and Exxon had one comparable citation.
The only real question to ask ourselves is this: How many other BP's in how many other industries are out there?
About The Author:
See some of my other work at: http://jms.info-matrix.us/
J Mark Soveign