If you have been aware of what is going on in the news, you have seen the devastating effects of the Deepwater Horizon Oil Spill that occurred in the Gulf of Mexico.
As we were talking about possible issues that affect the prices of stocks in Finance, the oil spill was debated. A fellow student heard on the news that BP would lose an estimated$20-$30 billion due to the spill; however, when looking at the amount that the stock price has dropped and calculating in the amount of shares of stock that are in the market, the loss was more on the $70-$80 billion range. When your stock plummets from $62 to $38, there are some major financial implications for the stockholders of the company.
And as BP’s failed attempts to control the oil spill continue, the stock price continues to fall.
Gulf of Mexico update from BP CEO Tony Hayward:
“Over the course of this week, our share price has decreased significantly, no doubt reflecting the market’s anxiety about our progress in stopping flow from the Macondo well and the longer term impact of the spill on BP.”
The financial losses for BP will be recovered eventually, but the massive ecological effect the oil has had on this part of the Gulf will be difficult to determine. The list affected by this accident is too long to capture, but hopefully BP can get a handle on the leak and clean this up before it gets much worse.