Christopher Kellermeyer
University of Redlands
Figure [ 1 ]: http://www.mcclatchydc.com/2010/05/21/94649/remembering-deep irrigate-horizons.html
Profiteering from Disaster RIG
Around 10:00 PM on Tuesday, April 20, 2010, almost 52 miles off of Louisianas tip, Transocean Atlantics Deepwater horizon had an explosion. The incident left seventeen maritime workers injured and gasified eleven. In addition to the casualties, 42,000 gallons of oil per day began spilling into the Gulf of Mexico. Humanitarians and environmentalists became outraged, lawyers began to salivate, and the Obama judiciary issued a six month moratorium on oil bore in the Gulf as safety conditions of deep water drilling companies were investigated. Profits for Transocean and competitors immediately sank as fleets were sidelined and relocated. With inevitable lawsuits, fines, and sidelined fleets, Transocean went from universe in deep water to deep crap. However, history tells us when on that point is disaster there is volatility; and, this speedy gap creates opportunity for profiteering. Deep water drilling companies experienced rapid stock declines over the next two months. Transocean (RIG) shares bombed from over $90 per share to slightly over $40 per share (see graph below).
Figure [ 2 ]: finance.yahoo.com
The chart shows us the decline in the stock price preceding the Deep Water opinion disaster. At the bottom of the chart, the vertical lines indicate trade volume. In months prior to the disaster, the stock price and trade volume were mainly stagnant; however, volume increased dramatically as those invested in the company relinquished their positions to attempt to bailout before the crash. For anyone with a modicum to invest, there is money to be made during such disasters and during the recovery level (now); still, before looking into the profit side of this particular situation, it is outgo to familiarize oneself with a companys history,...If you want to shake up a full essay, order it on our website: Orderessay
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