When last we visited BP on June 3rd, it’s stock was down from $62 to$36 and appeared to be heading further south. Indeed, by the end of the month it had bottomed out at $27.05 and it was dark days both on the water and in the markets (unless you had shorted it, of course).
Well, six weeks later and things are looking up. The stock has risen back to $38, and even peeked its head about $40 recently. And, there are more and more stories, especially on the financial pages, that the magnitude of the environmental damages simply aren’t going to be as grotesque as anticipated. (Of course, this is not a consensus opinion).
So where does that leave the company’s fortunes? There are still momentous uncertainties about the environmental damages and liabilities, which could add to the stock’s volatility. But on the other hand, if the worst-case scenarios were internalized in the price, and those scenarios haven’t materialized,… this is why I buy index funds.
UPDATE: Evidently, the Financial Times is thinking about this, too.