Buying stock in BP is a bit of a dilemma. If you had the opportunity to make some money at the expense of an environmental disaster would you take it? That’s the position many people find themselves in at the moment regarding BP stock price after the catastrophe of the oil leak. The share price has almost halved in value wiping billions off the stock price since the event occurred.
The first question to answer is, morally, are you ok with profiting from a disaster? Secondly, is it likely that’ll you actually make money from this? Think about it. Someone has to pay for this mess. President Obama has already hit BP with a huge bill and was quoted as saying that is just the start of the cost that BP will have to pay back. When you analyze BP’s income and expenditure at the end of the year this cost is likely to have wiped out much of the profit they earned. Suddenly you’re faced with a stock, although highly undervalued, has costs which are likely to wipe out it’s entire years earnings. It gets worse too. Who knows what the final bill will be. The fact that BP hasn’t been collecting the oil too as it’s been leaking into the sea is likely to affect their profits and their stocks. Does it sill sound like such a great deal?
Personally, I won’t be investing in BP. Part of it is on moral grounds and the other is purely business. I don’t think it’s a good investment when there are so many unknown costs involved. It’s likely that BP will be footing the bill for the disaster for many years to come. Instead, I’ll be looking at BP’s closest rivals to see how there share price is affected. Perhaps there will be a few bargains to be had there which won’t affect my conscience. Would you buy BP Stock?