Chart of the day: BP's market capitalization drop
Monday, June 14, 2010 at 12:01AM 
Economist story.
BP's share price plummets 13% by 1 June for a total decline of roughly one-quarter since the Deepwater Horizon disaster.
Concluding judgment:
Robert Reich, a former secretary of labour, has suggested that BP’s American operations should be put under temporary receivership to allow the government to take control of plugging the leak. This seems unlikely. But the idea that the company as a whole might be taken over has become significantly more likely as its share price has plummeted. BP’s market capitalisation is now less than that of its rival, Royal Dutch Shell (see chart), which has discussed a merger before and may now be contemplating one again. The scale of the stock’s fall makes it possible that the foreseeable losses, huge as they are, have not only been priced in, but even overpriced.
Reputational loss, and the possibility of losing further access to the gulf, where BP is a large player, are harder to calculate while the spill and its attendant inquiries continue. When the waters finally clear, though, there could be some interesting sharks swimming in them.
Don't cry for BP, Gulf of Mexico. The truth is, she did not love you enough.
Reader Comments (1)
This is indeed a matter where people in the Federal Government need to intervene. According to reason.tv, the oil platform is on federal land, the department that oversees the oil drilling operations in the Interior has exacerbated BP's ridiculously poor management, and liability outside of normal spill cleanup is capped at $75 million.
I'm almost always for economic freedom, but property rights involve responsibilities, and the government obviously must use its contractual rights through the subsidies it (the taxpayer, at my disapproval) has given BP.
I would have had BP own the area around the well, have them pay full insurance premiums for disasters, because then you actually have a good incentive not to poorly manage. Money placement matters, instead of taxpayers paying for a disaster, we could have had car drivers/oil consumers helping prevent risk.