Bad news for UK shareholders today as BP’s share price started falling as concerns grew that it could take months before BP can control the oil leak in the seabed. As we feared last week pension plans and long term investment funds will be affected by the sudden downturn of this “safe” stock.
This disaster just goes to show that there really is no such thing as a safe stock at all. Any company can experience unexpected problems at any time, and once the main city traders start selling the shares go into free fall. It is usually the small private shareholders that are left in the worse position as by the time they make the decision to sell they have already lost so much.
Pension plans are going to suffer as dividends are reduced due to falling profits. The operation in the Gulf of Mexico continues to cost BP millions of pounds and some analysts believe it will be August before the leak is plugged.