Daily Investment Tips

We know the Iphone exclusivity has kept AT&T in wireless business. With the Iphone exclusivity set to end anytime in 2011 investors have a reason to be concerned with AT&T stock.

If you believe the loss of Iphone exclusivity will have a negative impact on AT&T, with subscribers jumping over to Verizon or slowing subscriber growth then you can profit from the loss by shorting AT&T stock.Talk to your broker about the possibility of shorting AT&T stock.

What AT&T Thinks?

According to AT& T filing with SEC, “We do not expect any such terminations to have a material negative impact on our wireless segment income, consolidated operating margin or our cash from operations,” AT&T said

AT&T said more than 80% of its contract customers are on family or business plans that are less likely to see turnover.

What Business analyst are Saying,

Some surveys are telling us as many as 23% of AT&T users are likely to switch to Verizon when the Iphone goes to Verizon.

It’s hard to predict the impact of the loss of Iphone exlusivity, any position an investor takes on AT&T stock now will be speculative.

written by Constantine Njeru \\ tags: Amp, Business Analyst, Business Plans, Contract Customers, Exclusivity, Investor, Investors, Iphone, Negative Impact, Operating Margin, Segment Income, Stock Analysis, Subscriber Growth, Subscribers, Surveys, Terminations, Turnover, Verizon, Wireless Business, Wireless Segment

With BP Oil spill on the gulf of Mexico in the news 24-7, all that negative news vibe has had a negative impact on BP stock. Since the crisis begun BP stock holder have lost 80 Billion dollars of market value.

BP is facing lawsuits and cost of clean up. There is growing fear that the cost might be so high such that BP could be driven to the ground. The CEO has denied the possibility of going under, insisting BP finances are strong enough to withstand the current crisis.

After looking at BP finances I agree with the CEO.

Credit Suisse Group AG estimated the total cost of the clean up may reach $37 billion.

According to BP 2009 results, BP balance sheet was  like this:-

Cash equivalents – 8.3 billion dollars

Total Assets – 236 billion

BP Balance sheet analysis

Lets assume BP final bill is 37 billion dollars as estimated by credit Suisse, BP has a two options to pay this bill.

1. Sell Assets
2. Borrow new money to pay the bill.

BP has high value assets spread all over the world. BP can sell off some of these assets to raise the money it needs. In it’s balance sheet there is an item called long term investments, which is valued at 37 billion, this alone can be enough to offset the clean up bill.

With the price of oil projected to remain high, BP will continue to generate robust revenue. They can issue new debt based on projected revenue.

Unless the cost of clean up sky rockets, BP should withstand the Gulf of Mexico crisis

written by Constantine Njeru \\ tags: Balance Sheet Analysis, Billion Dollars, Bp, Bp Oil Spill, Cash Equivalents, Credit Suisse, Credit Suisse Group, Group Ag, Gulf Of Mexico, Mexico Crisis, Negative Impact, Negative News, New Money, News 24, Price Of Oil, Sky Rockets, Stock Holder, Term Investments, Value Assets, Vibe