According to Yahoo Finance, BP’s shares outstanding times dividend per share would result in over $10 Billion in cash flow created by suspending its dividend. A dividend suspension would provide credible evidence that the firm intends its shareholders to pay the damages associated with the massive oil leak. With such a signal, Americans can be more confident that BPs siphon will be directed at the spewing well rather than at the coffers of local, state and federal governments to foot the cost of the cleanup, lost tax revenues, higher unemployment, social insurance and diminished economic activity.
As it stands today, the corporate double speak regarding such costs undermines BP’s credibility. In its most recent comments, rather than affirming such an intent, BP simply references previous statements which are already in the public record. I’m sure this is on the advice of lawyers telling the firm to “do no more harm, to your legal case that is”.
This counterintuitive step might also staunch the bleeding in the company’s stock price by making clear to investors that BP will fund costs, set up reserves for future costs, accept responsibility, abandon its past practices regarding cutting corners on safety, and retain cash for development of new reserves in a safe manner in the future. Such a company might even be worth owning.