Why Buying this Pariah is a Bad Thing

Buying a Pariah

To the Editor:

The June 21 Other Voices essay by Whitney Tilson and Glenn Tongue ("Buying Into a Pariah") looks like a horrific example of self-interest. Their reasons to buy BP are flawed, outside of the socially reprehensible idea of buying it at all.

They say BP stock is extraordinarily cheap. So what? The stock is cheap because the company has created one of the largest environmental disasters in modern history. There is no reason why BP can't get even cheaper, or even go bankrupt.

The authors seem to believe that, like some of our banks, BP is simply too big to fail, and that American taxpayers should be grateful that they can pay claims on this unprecedented disaster. BP isn't too big to fail. There are plenty of other oil companies, as well as alternative energy resources.

The authors' T2 Partners fund owns quite a lot of shares in BP and now needs to make up ground to get back to even. Tilson talked on TV about buying BP when the price was about 35. The authors should have told readers the amount of shares and at what prices they invested in BP. They also should acknowledge that this disaster is unlike any of the ones before.

K. Blake Golding
New York

Whitney Tilson and Glenn Tongue reply: We did not write, nor do we believe, that BP is too big to fail, in the sense that if its losses rise, it will be bailed out.

We believe the company is profitable enough to earn its way out of trouble in all but the very worst-case scenarios. We first purchased BP in the mid-30s and have continued to add to our position as it has fallen.