General Question

kfingerman's avatar

Would it be ethical to invest in BP stock right now?

Asked by kfingerman (982 points ) June 5th, 2010

I won’t do it because it would make my skin crawl, but I think it would be a great financial move at the moment. Sure, they’ll take a big hit, but nowhere near the 35% market cap they’ve lost since the spill. This is a company that posted $6+ billion in profit last quarter. Even if they’re stuck with a $10B price tag for this, they’re still in the money big time.

I’m curious to hear people’s take on this…socially responsible investing, etc.

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36 Answers

missingbite's avatar

I have a problem with everyone assuming that BP did something unethical before an investigation. I am in Louisiana and don’t think they have been great a public relations so far but I want hard evidence that they were cutting corners before I judge them. This could have been just a terrible accident.

So far BP, I think has done as much as they can to cap the well. It is costing them big time money and I would think they want it stopped ASAP like I do.

People are now boycotting BP gas stations with signs and the station owners have nothing to do with BP. They just sell gas.

Lets find out what happened BEFORE we judge. Even our President is on the bandwagon, trying to tell BP how to spend their money. Who is he to tell BP how to spend money when BP hasn’t been proven to do anything wrong yet. What an idiot.

Now IF, we find out they were cutting corners and this could have been avoided, throw the book at them and prosecute. Let’s investigate first.

rebbel's avatar

I wouldn’t, but then again i never have and never will invest (other then indirectly).
And i believe that a great part of investors don’t care so much for ethics anyway, they care for profit, for money.

MrItty's avatar

@missingbite who is he to tell them what to do? He’s the guy who has to order Federal resources to the area to clean up the mess.

ucme's avatar

Well it wouldn’t be wise seeing as though it’s falling like a sack of shit from the empire state building. Ethical? Well that’s a whole new kettle of fish.

missingbite's avatar

@MrItty That’s fine. As of the time of his remarks, BP has not missed a payment or denied anything the Feds asked for. So why try to tell them how to spend their money?

BTW. Bobby Jindal has been begging for help from the Feds and all they have done is spent weeks telling him they need more studies on the impact of sand dredging. Like that is worse than oil. What a joke.

Lightlyseared's avatar

Has anyone seen BP’s website at the moment? There’s a list of useful phone numbers. One of them is a hotline for people who have ideas on how to help.

Not a good sign.

laureth's avatar

@missingbite – The Wall Street Journal recently remembered how to do some investigative reporting. They seem to have concluded that it wasn’t just a horrible accident, it’s the result of a series of corner-cutting and bad decisions made at every turn.

When the WSJ, a notably pro-business paper, says your business screwed up, you’re probably in deep crap.

To the original question asker: If you think it’s ethical to invest in the kind of company that makes the poor decisions cited in the article, well, you’re welcome to do so. Personally, ethical or not, I’d wonder what kind of good business practices those are in the long run. I don’t think I’d invest in them, but that’s me – I prefer the companies I own a tiny piece of to execute better decisions.

kfingerman's avatar

@ucme…“falling like a sack of shit from the empire state building” is exactly the point. The stock has fallen about 35% from where it was when the oil spill started. If you invest in it now and it goes back to where it was, you’ve made 35%. This is assuming this spill doesn’t do long-term irreparable financial harm to the company…and I think it won’t. Sure it might keep going down a bit, but I’d bet it’ll be much higher in 2 years than it is today.

ucme's avatar

@kfingerman Fair point well made. I bow to your apparent knowledge of the markets.The nearest I get to stock is tasting my wife’s delicious gravy.

missingbite's avatar

@laureth I for one don’t give a lot of credit to many of the news outlets. Granted The Wall Street Journal is one of the better ones but to think that they could come to a fact based conclusion less than 60 days into an incident is far reaching at best. Not to mention the fact that it is still going on and nobody has had a chance to research the site itself. I feel that it is very irresponsible to place blame this early. All news media outlets have been doing this for years instead of reporting what is going on. Now our President is doing this also.

Could it have been negligence on the part of BP? Sure. Was it? Nobody knows YET.

Having been on the wrong side of blame before an investigation was done, I can tell you it is wrong to go down this path. Wait until all facts and studies are in and then, and only then, go after BP with all the fury we can muster if they were to blame.

What we need in this situation is all to come together to get this stopped, cleaned up, and researched so it never happens again. If that is possible.

As to the OQ, it will depend on individual belief. I feel right now it is OK. If someone had bought Exxon during the Valdez and held onto it until now, I would think you would have made a lot of money.

GrumpyGram's avatar

Oh, puleeeze. That’s like asking if you’d invest in tobacco if they paid a 20% dividend.

laureth's avatar

@missingbite – Just to be official, you are saying the WSJ fabricated their investigative report?

missingbite's avatar

@laureth I’m not saying the fabricated anything, just that they are not getting the whole picture. We don’t know if the cost cutting that BP was doing was directly related or not. It probably was but I don’t want to call it proof until a real investigation has gone on.

I will never place blame on someone because a newspaper found some damming information.

laureth's avatar

@missingbite – I am assuming, then, that a government investigation is what you’re waiting for? There are lots of people out there who won’t trust that at all. Nor are there very many who would trust BP to do any kind of unbiased investigation on itself. Who would do an investigation that you, and most people watching the situation, would trust?

kfingerman's avatar

@GrumpyGram…I supposed that’s fair. Though just in the interest of devil’s advocating, how much would tobacco have to pay before you’d invest there? I mean…you’re not making people smoke. Hell, you’re not even supporting the company or really helping it at all by owning its stock…you’re just profiting from its doing well. What if you invested in the tobacco company and then used the profits to fund anti-smoking campaigns? I’m not going to invest in BP…because I think it’s wrong. I ask because I wonder why I think it’s wrong and whether people in the fluthersphere would agree…

missingbite's avatar

@laureth I’m not sure we will ever know the real truth. I would start with a real unbiased panel to investigate. The government will have to set this up and you are correct that the chances of the panel really being unbiased is also a stretch. Politics will get in the way.

When a plane crashes, we investigate it with cooperation from all airlines, the unions, and the NTSB. Together we can find the reason for the crash and learn something from it. It is not to set blame.

My panel would be comprised of BP, Exxon mobil, leading engineers in the field, and others that would have no financial or political connections to the accident. It would not involve any Senators or ex Senators who are looking for lobbying jobs.

laureth's avatar

@missingbite – FWIW, the WSJ did talk to employees of BP, contractors, other industry experts such as engineers, and examined company documents. It’s about as fair of an investigation as you’re going to get so far. (Shrug.) To each his own.

lilikoi's avatar

Uhh… was it ever ethical to do that???

lilikoi's avatar

@missingbite

“I would start with a real unbiased panel to investigate. The government will have to set this up and you are correct that the chances of the panel really being unbiased is also a stretch…My panel would be comprised of BP, Exxon mobil, leading engineers in the field, ...”

Indeed. There is no such thing as a “real unbiased panel”. As soon as you put BP and industry experts on the panel, you’ve got major bias.

I think it is safe to say that there are a LOT of politics surrounding this, as well as some NTSB investigations.

missingbite's avatar

@laureth Again, I agree, especially with, “so far.” My point is that this early, it’s not fair to judge. I could find documents that make BP look like the poster child for safety. The Deep Horizon passed our governments tests with flying colors. I could also find employees at any company that are disgruntled.

BP was probably in the wrong. I just want to have more info than the WSJ could come up with in 46 days on a witch hunt.

You’re right…to each his own.

filmfann's avatar

Ethical? It’s probably ethical. But it’s probably not a good idea. This could put them in receivership.

Nullo's avatar

I suppose it’s ethical enough. Stocks aren’t really subject to ethics.

MissA's avatar

I’ve listened to credible workers on the BP platform…listened to BP and Halliburton people deficate on each other in an attempt to shift the blame, which will determine their cash responsibility. Watched and listened as BP lied and misled people about the reality of the situation. I could go on and on. Bottom line: We all do what we feel is morally, ethically and financially prudent (or not). I feel that rarely does someone regard all three to be equal considerations.

Nullo's avatar

@MissA The way I see it, it’s the business of business to do what is financially prudent, and it is the business of people to do what is morally right. One would think that this would suffice for regulation, but that, sadly, is people for you.

MissA's avatar

@Nullo When I was in business, my decisions many times had little to do with immediate financial prudence. Usually, when you do what’s right…in the long haul, that’s what is financially prudent.

I don’t understand what you are saying about “the business of people to do what is morally right…” There is no distinguishable line between the two.

Nullo's avatar

@MissA I’m saying that people ought to do what is morally right, and square that with doing what is best for their business.
I think that if we could just manage the first part, we’d solve a lot of the world’s problems.

plethora's avatar

Just to shed a bit of light on a minor point:
Buying the stock of a company helps the company in no way whatsoever. You would be buying the stock from another owner of the stock. The other owner is the only person who would benefit….and possibly the purchaser at some point in the future.

It makes no difference whatsoever to BP whether you buy the stock or not. It does make a difference if thousands of people start buying it, as that will drive the price up and benefit the company’s stockholders, many of whom are BP top executives.

However it is not immoral to buy it unless the feel that drilling for oil is immoral.

mammal's avatar

America would do well to realise BP is big, i know that may come as a shock to a nation used to a sense of it’s own grandeur, Even bigger than Obama, so if Obama want’s to pick on BP in some flawed sense of self righteous indignition, he will lose. Get real.

perspicacious's avatar

Yes. Buying stock is not supporting the company, it is buying a piece of it.

LostInParadise's avatar

Businesses will do whatever they can get away with to make a profit. The point about BP is that they were not able to get away with what they did. It becomes a question of whether you think they have sufficient management skills to remain competitive. What I find particularly irksome about BP is the horrible way they handled the PR. Their CEO said that the amount of oil leaked is small compared to the amount of water in the ocean. Is he nuts? I can think of several small pills of inconsequential size that he might contemplate taking.

In terms of ethics, I would look at the product or service of a company and its general mode of operation. I would feel uneasy investing in any oil company, because I do not think that is the way to go. I would also not invest in Walmart, because of the overall harm they cause to communities.

trbryant's avatar

The answer to this question will be based on your on moral and ethical views. It is not a question of debate but of your perception of morality and of God.

MissA's avatar

@Nullo I don’t think we disagree.

ItsAHabit's avatar

Missing bite (who posted the first response to this question) is right. Even if we assume that drilling for oil is immoral and that BP is immoral, there is absolutely nothing immoral about investing in it. And you don’t invest in it, that action will help make its stock even cheaper and a greater bargain for those who do invest in the company.

mullet's avatar

if you can afford it do it. provide for yourself and do not worry about offending others. a good investment oil companies rarely go out of business or fail to profit even after a mistake like that one

plethora's avatar

Why not?

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