Hey, investors, did you hear the big news? British Petroleum has been upgraded from "hold" status to "buy."
That means that despite more than 19 million gallons, maybe as much as 35 million gallons from some estimates, of toxic oil spewing out of their leaky pipe at the bottom of the Gulf of Mexico, experts are touting BP as a great place to put our money.
They are advising us to financially back a company that has caused the biggest oil spill in USA history. Oh, and guess what? They are doing so even as the record oil spill continues to flow. Thousands of gallons, 25,000-plus to be more accurate, are being discharged into the water on a daily basis.
The tragic explosion that started this oil leakage occurred back on April 20th. Yet, here we are more than a month later and BP has yet to stop this harmful contaminant from gushing into the Gulf coast waters. Using conservative estimates this oil spill has already surpassed the 1989 Exxon Valdez disaster by several million gallons. And, again, that number continues to rise.
But, great news! While the discharge continues to destroy our green planet, you can make a little green off of it. That according to one oil analyst who recently raised his estimate on BP from "hold" to "buy."
"This is buying when you believe that an event is being overly discounted by the valuation that is currently in place," said Mark Gilman of The Benchmark Company on CNBC. "The $49 target essentially resets the valuation relationship in place prior to the spill...And takes into account, in addition, what we consider to be an onerous discount, which we estimate to be about $4 ADR (alternative dispute resolution) for potential consequences of the incident."
It is so reassuring to know that such an enormous environmental disaster has been labeled an "incident." It's also encouraging to know that while the noxious lubricant continues to spew out from this "incident" and the entire region is negatively impacted, we have at least put a price on the "incident." A $4 hit in stock price.
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