Monday, October 25, 2010

Pressure Rising to Restore BP's (NYSE:BP) Dividend

BP (NYSE:BP) CEO Bob Dudley is under increasing pressure to restore the dividend of BP, as rivals increase their margin of growth over the oil giant.

This of course must include the increase of the share price of BP in the aftermath of the Gulf oil spill, and the remaining uncertainties as to the level of liability BP will face.

The major unknown continues to be whether BP will be designated as being grossly negligent in the circumstances. At stake is billions in liability.

One major reason for the pressure to restore the dividend is to call the bluff of the company at to their confidence going forward. A dividend is one of those elements confirming the confidence of management concerning the future of a company.

If the dividend isn't restored, shareholders will probably flee the company, opening them up to being taken over, as some rumors have already been circulating about.

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