Active Stocks: BP (BP) shares hit 14-year-low

by StockPicker
source:beaconequity.com
British Petroleum (NYSE: BP) shares plunged 6% on Friday, closing to a 14-year low amid growing concerns that the total liability associated with the oil spill in the Gulf will be larger than expected.

As BP shares continue to retreat for the ninth straight week, the company’s market value has dropped by approximately $100 billion since an explosion at one of its deepwater rigs sank to the bottom of the Gulf in late April.

Rising costs, inevitable legal liabilities, and BP’s inability to stop the leak of an estimated 2.0 million gallons per day, have increasingly spooked shareholders to sell their shares.

BP is under increasing pressure to assure the costs associated with capping the well and future costs to clean the Gulf, which the company says has reached $2.35 billion already.

Given the high costs in the debt market, analyst Alastair Syme of Nomura Securities Co. said he believes an equity investor may be needed in the short term to fund the crisis, further diluting the shares.