It's not hard to understand why people are mad at BP, the energy giant whose oil
has been spreading through the Gulf of Mexico for 50 days, despite several failed attempts
to fix the leak, causing a disaster that could take years to clean.
The Department of Justice is exploring the possibility of bringing criminal charges,
but that may be the least of BP's worries right now. The company's stock is currently
trading at half of its 52-week high. Here's what it has to look forward
- 'Free Fall' for BP Stock Talking Points Memo's David Kurtz writes, "BP share prices have gone off a cliff today. Earlier this afternoon, they were as low as they've been since 1997, but they've declined farther since then." MarketWatch reports, "BP should suspend dividend payments to shareholders until it stops the leaking well in the Gulf of Mexico and cleans up the mess from the disaster, a group of U.S. lawmakers said Wednesday."
- The Dividend Dilemma Reuters' Felix Salmon explains, "The company has been paying out a steady 84 cents per share per quarter, and that payment is now in jeopardy. ... BP's coffers are not at all a safe place to store shareholders' cash: they can be raided by all manner of legal and regulatory eventualities. But there's another dynamic at work here: BP and Shell between them account for 50% of the dividends paid by UK companies every year. It seems quaint, but there really are a lot of far-from-wealthy people in the UK who live off their dividend income, and those people constitute a surprisingly large part of BP's shareholder base. If BP suspends its dividend, the only way they can get money from their stock is by selling it."
- Cut Off BP's $2B Defense Contracts The Nation's Jeremy Scahill points out, "Contrast the Congressional response to ACORN's federal contracts with its response to BP, which does billions of dollars in business with the federal government, specifically the Pentagon. BP holds more than $2 billion in annual US defense contracts and continues to be the premiere provider of fuel to the world's largest consumer of oil and gas: the Pentagon. ... And yet, there is no real, bi-partisan Congressional march to de-fund BP."
- Congress Should End All BP Deals E.D. Kain urges, "Pull all of BP's government contracts and send a clear message to environmental offenders that the feds will not do business with companies with bad environmental and safety records. ... Nationalizing BP, as some pundits have suggested, strikes me as a huge waste of resources and probably a huge step in the wrong direction, making the oil giant even less accountable by weaving it even more indelibly into the federal government. Cutting all government contracts with BP, on the other hand, is a rational response to this catastrophe."
- Nationalize BP! The Center for American Progress' Brad Johnson suggests, "If federal officials believe that BP engineers should continue to work on the problem, the President has the authority to have those people working directly for the federal government. In fact, the president has the authority to nationalize BP America and seize all of its assets, rendering the question of reliance on BP moot. If Obama does not believe that the Clean Water Act's 'spill of national significance' provisions give him sufficient authority, he can rightly declare a national emergency, or demand that Congress deliver him necessary legislation. Or there's an easier option: BP is on the hook for all costs of this apocalyptic disaster. Obama can simply buy BP America and send the bill to its foreign parent company."