Cuz I’m free…free fallin’… One year BP bonds have fallen 5%, trading at $92. 9% yield for 1 year…will debt lead the equity lower. BTW it opened today at 96.5
8% return that too on debt security. Awesome. How’s it credit rating?
BP is now officially excluded from the credit markets. I hope they have enough cash!! That div should be canceled immediately. BP is Aa2/AA- on negative watch
I’m not buying anything, but what do you guys think? Is it a buy, do you make a play out of it and go short BP/long other oil firm debt? What are the different moves on this?
I’d stay away from BP. Far too many unknowns that could negatively affect the price.
You better have thick skin to try to catch that knife
This is a situation in which it is impossible to think of a reason to get involved. The risk/reward scenario is dead. Even if the company survives, this stock will absolutely not V bottom. If you want a bargain buy some servicers that have gotten destroyed in sympathy. Look at stuff like DO. Cut in more than half and has no exposure, and the GOM is not a large piece of their business at all. If you are going to catch a knife, might as well make it of the butterknife variety.
HighYielder Wrote: ------------------------------------------------------- > This is a situation in which it is impossible to > think of a reason to get involved. The > risk/reward scenario is dead. Even if the company > survives, this stock will absolutely not V bottom. > > > If you want a bargain buy some servicers that have > gotten destroyed in sympathy. Look at stuff like > DO. Cut in more than half and has no exposure, > and the GOM is not a large piece of their business > at all. > > If you are going to catch a knife, might as well > make it of the butterknife variety. You are right on. Unfortunately I’m not allowed to buy puts or short individual equities otherwise I’d be riding this lower. The move in the credit markets is going to punish this stock.
Implied option vol on BP stocks has a crazy negative skew. If you are a bull on the stock, that’s probably the way to play it.
Out of the money puts are craaaazy expensive.
Balance sheet is very strong. Since so costly, selling volatility at 120% for 1.5 weeks covers a remarkable amount of further downside risk, and the stock is extremely stretched at this point. So obviously I’m liking the looks of it. We’ll see. If things go sharply against me, I’ll bail, but it’ll have to be awfully sharp, like another 10% drop.
credit spreads getting completely blown out…equity and debt are both trading like lehman before it was forced to bow down to the market
BP has a well-understood balance sheet. It’s far, far oversold, I think. We’ll see!
tombrokaw4 Wrote: ------------------------------------------------------- > credit spreads getting completely blown > out…equity and debt are both trading like > lehman before it was forced to bow down to the > market Exactly. Only difference is they have almost no reliance on the credit markets. This should FORCE the dividend cut even if Congress cant. There is NO WAY any responsible corporation would pay the dividend when their CDS is exploding like Ron Jeremy.
Reading this has just switched an interesting idea in my head. I will write a post later.
ASSet_MANagement Wrote: ------------------------------------------------------- > Reading this has just switched an interesting idea > in my head. I will write a post later. Interesting this would show up right after a post about Ron Jeremy.
Whats worse to watch, BP spewing or RJeremy spewing?
What are BP CDS spreads looking like?
385 on the 5yr. Up 125 bps on the day. Much wider in cash.