After the massive roller coaster yesterday(down 15%) and today(up 12%), it shows that many of investors has no clue what the future of BP will be. Some said the swing comes from the speculation that BP may go bankrupt.
Really?
Yes BP will pay a hefty sum of penalties shared with other companies. But it is not anybody interest to see BP go bust because it will do no good for the shareholders, the government (taxes) and the victims from this spill (there is no cash to pay).
The idea of having pre-package bankruptcy is another stupid PR campaign on top of the jokes from the Jester.
In my view what BP should do to restore the shares value:
1. Stop the spill A.S.A.P
2. Don't talk and act stupidly as it destroys the investor confidence and spoils corporate image.
3. Once the spill is manageable focus on the settlement. No need to have a prolonged legal battle, it will only give the benefits to the lawyers. BP just admit the operational blunder, then sorted out the liabilities that BP has to pay to the people affected by this accident. Have it settled within a couple of months. In this case the government must act decisively also to close the case as quickly as possible.
Anyway it is better to put the management effort to business growth, improving safety and efficiency.
4. After bleeding from penalties and fines, BP may need white knight (yellow is more appropriate I believe). The idea is simple. Get the knight to supply the cash to pay the settlement and let BP run its business as usual. M&A could be too complicated and political cost is too high. BP can issue CB or SB sweetened with production contract to circumvent the political fallout.
5. Replace the Jester and the gang.
Well that's all folks. I just hope that next year we can enjoy oyster and shrimp in Louisiana again.
