So, unless you've been living in a cave, BP/Transocean had an oil rig disaster that exploded back in April and has been spewing oil into the gulf since. Numerous attempts have been made to fix the leak, but there has only been limited success. It is quite a tragedy for those who lost their lives, the animals, and the businesses affected by it. So,
Obama is demanding that BP cut its dividend although analysts are confident that BP could pay both its dividend and handle the cleanup costs/claims expected to near $40 billion. BP made $20 billion in profit last year and can handle additional debt.
So who are these shareholders anyway? They must be real bastards to invest in an oil company, right? Well as it would turn out, there are quite a few U.S. pension funds who now have a capital loss of 40% since $90 billion in market capitalization has been wiped out. Things haven't been helped much with Obama repeatedly beating the drum with his oil bashing and his other highly professional comments such as "whose ass to kick."
But, if the company can handle both the costs and the dividend, then it is not a politician's business to say what a company should do with its stakeholder's money.
As an update, BP bowed to political pressure and cut its dividend for year and set up a $20 billion fund.
As an update, BP bowed to political pressure and cut its dividend for year and set up a $20 billion fund.
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