BP’s Shares Plunge: Bankruptcy on the Way?
June 10, 2010
(ChattahBox)– BP’s shares have plummeted nearly 50 percent, since the Deepwater Horizon oil disaster in April. And with the specter of an avalanche of lawsuits, settlement payouts, and government penalties, talk of a possible bankruptcy filing has shaken investors, sinking BP stock by nearly 16 percent in the U.S. after London’s market closed on Wednesday.
On Thursday, BP’s UK share price was down by nearly 12 percent, which is its lowest level since 1997. And in the U.S. market, BP’s shares were down by 9 percent.
BP sought to quiet the fears of investors, especially British companies that have heavily invested pensions in BP stock:
“In response to the sharp fall in the US, BP said it was “not aware of any reason which justifies this share price movement.”‘
“In its latest update on the spill, the oil giant sought to reassure investors that it was on a strong financial footing with a stronger-than-forecast cash flow.It also said that the total actual cost to date was some $1.43bn (£1bn). This compares with a total of £55bn that has been wiped off BP’s value since the spill began.”
Meanwhile, the oil continues to flow into the Gulf of Mexico, poisoning the ocean, beaches, killing wildlife and destroying the fishing and tourism industries, with no end in sight.