BP Oil Spill Conspiracy and other Conspiracies.

[SeanNewman]

*Note* I know there is a thread on the spill, this is different than just the leak and dead fish.

I was reading a news story this morning about BP spreading the blame, and on one of the poster's comments it is mentioned that all sorts of sketchy things were happening in the months and weeks before the oil rig went down.

The quick version of the accusation is that there was a massive amount of BP stock sold off just before the disaster.

That got me curious, so I did this basic search:
http://www.google.ca/search?hl=en&&sa=X&ei=HIKHTPjEOIW0lQfps9gU&ved=0CAYQvwUoAQ&q=bp+oil+spill+sold+share+goldman+sachs&spell=1
and obviously it's quite full of hits.

Does anything think that there is anything to this, or is it just a Michael Moore-like half truth telling of the story (for example, if the company had a history of buying and selling millions of shares every year and these articles only list the sells).

Like many of you probably have, I've also received my share of "fear the conspiracy" forwarded e-mails about how we should be worried about the World Trade Center being brought down by pre-placed demo, Muslim demographics taking over the world, etc.

Somewhat tongue-in-cheek, but what other crazy conspiracies are people tracking that we should all be terrified about?

 

[HItorMiss]

There is only one thing to fear....

Zombies man, when they rise and we have the Zombie Apocolypse none of the other things will matter...

Now if you will excuse me I am going to sit in my basement and clean my guns  :camo:

 

[ModlrMike]

We live in an age of conspiracy theorists. It doesn't matter what the event, someone will always claim conspiracy. In the past, these folks were largely written off. With the reach of the internet, there's a world wide audience at their deluded fingertips.

Note: I don't believe that 9/11 was an inside job, nor do I believe that the BP spill was pre-arranged, nor do I believe that Afghanistan is a war for oil and that Haliburton et al stand to gain...

... many others do!

 

[Edward Campbell]

...
[/quote]


It is quite normal for companies to buy their own stock whenever the price falls. They want stock on hand to sell when the company needs cash or to use for mergers and acquisitions. Some companies want to have a certain minimum percentage of its own stock in its own hands, to help control e.g. the Board of Directors and to vote the "company line" (annually) on matters like dividends.

Thus, there is nothing at all odd about a company buying and selling its own stock - in order to have a massive amount of stock to sell off BP must either have:

1. Diluted its own value by either "splitting" its own stock or issuing new stock - neither of which would have gone down well with shareholders; or

2. Bought massive amounts of its own stock earlier.

Option 2 is, I'm about 99.9% certain, the truth.

 

[SeanNewman]

Mr Campbell,

That is how I was looking at the BP one as well.  Someone did some digging and found a couple small "facts" that were taken out of context and don't show the big picture.

A lot of people buy and sell massive amounts of shares all the time and shift their money all over the place, so it would not be uncommon for them to keep buying and selling the same stocks.  In fact, in the last few days of the "old GM", trading was through the roof because it was all over the place.

Any one of those buys or sells could have resulted in a confused headline like "GM CEO buys 1 million shares in closing minutes", and then fails to mention he also sold them an hour later, and then bought more.

 

[Edward Campbell]

There's a (subtle?) difference between a corporation buying (and selling) its own stock and, in some (most) instances, one of the corporation's officers buying and selling.

In both cases regulators may (usually should) look for signs of insider trading. Corporations may, sometimes (even often?), trade on insider knowledge - it is, de facto impossible for the corporation qua corporation not to have insider knowledge. What would be improper (illegal) would be for the corporation to trade on knowledge that would not, in the normal course of events become public knowledge. In fact, many of the big corporate 'buy backs' usually accompany a 'good news' announcement from the corporation. Corporations are, broadly, precluded from selling based on their inherent insider knowledge of bad news. Individuals (and yes, I know a corporation is a legal individual) are in a different boat; they, especially if they are corporate officers but even if they are just friends of corporate officers, are always forbidden to trade based on insider knowledge - good or bad - remember Martha Stewart?

I'm sorry, that's a gross oversimplification and I'm too lazy to look up and cite sources.