The stock is trading up another 3% at 33.77. That's on top of yesterday's 15.7% gain.
This was the story on Wednesday:
British Petroleum: A Month From Chapter 11? (BP)
Shares of BP (BP) are off $4.20, or 12%, at $30.50, extending rather dramatically their slide from the late morning, apparently prompted by some pretty harsh views expressed by energy investor Matt Simmons of boutique investment house Simmons & Co.
Simmons, who wrote a book, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, tells Fortune’s Nin-Hai Tseng today that the Gulf of Mexico spill could get much worse. “There’s a lake at the bottom of the Gulf of Mexico that’s over 100 miles wide and at least 400 to 500 feet deep of black oil,” says Simmons, and a hurricane could cause that lake of to “paint the Gulf Coast black.”
And today, from the Houston Chronicle's NewsWatch: Energy blog:Simmons thinks BP’s a step away from insolvency:Tiernan Ray goes on to explain his disbelief.
They have about a month before they declare Chapter 11. They’re going to run out of cash from lawsuits, cleanup and other expenses. One really smart thing that Obama did was about three weeks ago he forced BP CEO Tony Hayward to put in writing that BP would pay for every dollar of the cleanup. But there isn’t enough money in the world to clean up the Gulf of Mexico. Once BP realizes the extent of this my guess is that they’ll panic and go into Chapter 11.Really?>>>MORE
BP gets an upgrade, dividend debate actually help.
The rest of the world may think BP is on the verge of bankruptcy, but equity analysts aren't buying it. Investment bank Simmons & Co. said this morning they are upgrading the rating on BP's stock (from "Neutral" to "Overweight"), saying they find bankruptcy unlikely:Here's the report via ZeroHedge (16 page PDF)
"The next 12-24 months are likely to be challenging and we would characterize our note as a high-risk upgrade, given the myriad of uncertainties that remain," the analysts said in a research note. "Having said that, the kitchen sink of headlines have been thrown at BP shares over the past 2 weeks, thereby partially desensitizing the shares to the news. Meanwhile, the brewing debate of BP pensioners vs. Macondo victims is generally supportive of BP shares, in our view."BP will likely face criminal negligence charges (which they expect will be reached via a settlement with federal officials) and total BP liabilities from the Macondo will be about $42 billion, Simmons & Co. said. Even using their high-end, worst-case spill liability scenario of $91 billion, Simmons' research director Robert Kessler said he thought BP would survive....MORE
Here's Simmons' June 9 Fortune commentary: