And so it's started. BP shares have been soaring on rumors
Interesting to note that The Wall Street Journal got hold of the analyst's reports and points out that these guys are just waxing lyrical, letting their imaginations take over.
Certainly, the talk around the traps is that ExxonMobil is getting ready to take advantage of BP's sinking share price. But it's unlikely to happen, and for a very good reason. Sooner or later, BP will plug up the leak and when that happens, its shares will rebound.
Damian Reece from the Daily Telegraph says you don't go buying companies on the basis of a one-off event. Reece says: "This is no long-term, gradual slump that has been slowly eating away at BP's value allowing a bidder to ride to shareholders' rescue. As soon as it's clear BP is getting on top of the containment and clean-up operation in the Gulf of Mexico its share price is likely to recover and the value gap starts to disappear".
He's dead right. From time to time, analysts need to take a cold shower.
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