BP's Stock, One Awl Reader, Both Winners Six Months Later
by Abe Sauer
Six months ago, BP’s stock price had been halved from its January high. It seems that pumping 50-odd thousand barrels of oil per day into an open ocean is not a profitable use of oil? (Though, as we’ll soon demonstrate, it can be.) With its stock under $30 and Congress sending out hearings e-vites to oil executives, we wondered where BP’s stock would be six months later.
At the time, it was already two months after the April 20th rig explosion. Who knew how long it would be until BP could stop the open flow of oil? (Remember when setting the Gulf of Mexico on fire was the “good plan?”) Publications were offering headlines like “’Reasonably High’ Chance BP Files for Bankruptcy” and “Weighing the Possibility of Bankruptcy for BP.” But then, as we noted on June 24th, “six months is a long time for America to sustain outrage and/or focus.” So, to make the journey interesting, we offered one share of BP stock to the commentor who could guess, to the nearest penny, BP’s share price on Christmas Eve day. With the market closed tomorrow, today is that day.
One lasting feature (besides the irreversible ecologic damage) of the BP disaster is the 2010 Federal Election Commission reports on activity of the BP Corp. North America PAC. After an active giving period in December 2009 and the early months of 2010, activity in May is of a nature rarely found in FEC reports: Candidiates giving money back.
In reports filed May 8, Linus Barton, William Shuster, Jon Kyln, John Shadegg, Jim Costa, Saxby Chambliss and Joe Barton lodged negative donations with BP’s PAC. Charles Gonzalez actually took $1,000 from the PAC on May 19 but clearly sobered up and returned the money on July 7. (Yet, there were plenty of politicians who took money from the BP North America PAC in 2010 and didn’t see a need to return it, including: Blanche Lincoln, Jon Shimkus, Terry Lee, Peter Visclosky, Cynthia Lummis, Lisa Murkowski, Richard Pombo, Rob Portman, Dennis Rehberg, John Culberson and the “Honorable” Michael Conway.) After June, the BP PAC activity dried up altogether. No takers in an election year? What a shame.
In the end, the one who really got screwed in the whole BP accident (beside the 11 dead rig workers, their families, the clean up worker who shot himself, the clean up workers with lasting health problems, the millions of Gulf residents, future vacationers, sea and animal life, future generations of human beings), is Steven Newman.
After 35 years of service to the company, Transocean CEO and board member Robert Long retired, making way for Steven Newman to step up and become the new CEO on March 1, 2010.
Today, Google News Archive results for “robert long + transocean + gulf + spill”? One. Google News Archive results for “steven newsman + transocean + gulf + spill”? Eighty-two. Guess which guy had to go before Congress and say, “The last few weeks have been a time of great sadness and reflection for our company — and for me personally?”
But there is a bright side for Newman. When he faces investors at the end of 2010 he can point to the new revenue stream created under his watch. Transocean was paid a hefty $1.5 million per day by BP to drill the relief well to seal off the gushing, fatally-flawed oil well that BP had paid Transocean to drill. Better yet, Newman can smile when he reports the $267 million profit Transocean made from insurance payments it received for its sunken Deepwater Horizon rig. So congratulations to Mr. Newman, who used capitalism to turn British catastrophe into American profit.
Without furthur ado, the final profit on our one share of BP stock. Purchased for $29.67, the one share closed Thursday, Dec. 23 at $44. That is a six month profit of $14.33, or a 48.3% return. (Not counting transaction loss.) Six months ago, if we had invested $10,000 (an amount of money many Americans have available), it today would be worth almost, yes, $15,000. (Not counting soul loss.)
Of course, for the winner of our contest, it is all profit. This lovely Awl reader and budding energy market analyst will join such luminary shareholders as Wisconsin Senator-elect Ron Johnson, who during his campaign against Russ Feingold said that he would hold his considerable BP stock and sell it at higher prices to help finance his campaign.
Other Congressional Wisconsinite Rep. James Sensenbrenner, who in addition to owning over $100,000 of BP stock, has voted to restrict stem cell research, deauthorize “critical habitats” for endangered species and allow workplace discrimination based on sexual orientation. He’s also seriously against moratoriums on offshore drilling, which means, as a newly minted BP stock holder, he’s on your side.
Then there is shareholder Martin Feldman, a U.S. District Judge who ruled to overturn Obama’s offshore drilling moratorium.
And the winner is: Commentor #3,449 “elbot,” whose guess of $43.29 was closest to today’s closing price without going over. (Condolences to Mister Hippity, whose $43.21 was damn close. Note to Goldman Sachs, hire these two!)
Congratulations elbot, you are now both part of our energy problem, and solution. Please email abesauer [at] gmail.com to make arrangements.
Disclosure: Winner assumes all taxes, including, but not limited to, the ones we know about, which are none (but that doesn’t mean there aren’t any). Winner will also have to disclose his or her SSN to the author (but, for God’s sakes, not in an email!). Void where prohibited by law etc. etc.
Abe Sauer is working on a book about North Dakota.