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Page added on June 18, 2010
Matt Simmons Retires and Shorting BP Stock
Matt Simmons abruptly announced today that he would retire from the board of Simmons & Co.–the company he founded in 1974–effective June 30.
Meanwhile, Simmons & Co. also issued a statement in an apparent attempt to distance itself from its founder. As Houston Business Journal reports:
“..on June 14, [Simmons & Co] issued a statement dated May 12 in which [CEO Mike Frazier] distanced himself from the founder, saying that the former chairman’s views were not those of Simmons & Co. Frazier referred to Simmons’ comments related to the Deepwater Horizon rig explosion and the implications for the industry and the individual companies.”
You might recall in a Bloomberg interview on May 28, Matt Simmons endorsed the nuclear option as the only viable solution for the oil spill. later on, BP shares slid to a 14-year low, around the same time Fortune magazine (on June 9) quoted Simmons as saying BP had a month before it would file for bankruptcy. As recent as last evening in a CNBC interview (at around 6-minute mark) Simmons also intimated that the Gulf oil leak was at 120,000 bpd, instead of the official estimate of 60,000 bpd.
Being a devil’s advocate, my suspicion only grew each day when Simmons seemed to have become increasingly “passionate” about preaching the worst possible outcome and solution (a nuke bomb? come on!) to this unprecedented disaster.
Well, say it isn’t so, but according to Barron’s,
“Simmons has a 4,000-share short sale on BP that he picked up when the stock hit $37. That’s in addition to a prior 4,000-share short sale he made at $48 a couple weeks prior. “It’s going to zero,” he says of BP stock. Mind you, Simmons has an interest and a deep investment in moving beyond fossil fuels.”
The Barron’s article went on to note that Simmon’s Ocean Energy Institute, a renewable energy think-tank and venture capital fund he started in 2007, is involved in a project to develop off-shore wind power facilities and other alternative energies.
5 Comments on "Matt Simmons Retires and Shorting BP Stock"
Edpeak on Sat, 19th Jun 2010 3:51 am
Far be it for me to defend Simmons, but if he didn’t invest on his beliefs, people would criticize him to “put your money where your mouth is!” The key thing is the news should, of course, disclose to the public his investments related to the analysis he is giving in media interviews.
Also, you say he has about $340,000 he could make if BP stock went to zero, if I understood correctly?
That’s less than 1% maybe less than 0.1% of his net worth, I believe, if reports of him being somewhere between a multi-multi-millionare and a billionaire, are correct…anyone know? If so, then this would be like you or I having $340 (not $340,000) or even $34 we could make from a bet…can anyone confirm Simmon’s net worth, or at least ballpark?
Dan on Sat, 19th Jun 2010 1:28 pm
Is this the same Matt Simmons who about 5 years ago predicted the US would suffer a natural gas shortage (thanks to new technology there is a surplus of natural gas)? Is this the same Matt Simmons who wrote “Twilight in the Desert” in which he predicted that Saudi Arabia’s oil production was about to collapse (it didn’t)? Is this the same Matt Simmons who placed a bet that oil prices would average US$200 in 2010 (extremely unlikely now)? Is this the same Matt Simmons who is invited on TV broadcasts where he makes outrageous statements?
KenZ300 on Sat, 19th Jun 2010 9:58 pm
Our political leaders need to move our countries to speed up the transition to alternative fuels.
Between wars for oil and environmental disasters in the Gulf and elsewhere we need to transition from oil now.
Economic security and energy security demand that we move to alternative fuels. What will happen to our economies when oil goes back up to $147 a barrel?
We need to plan for that now. With China and India demanding more and more oil every day it will not take long before demand exceeds supply of oil driving up the price to unheard of levels.
Edpeak on Mon, 21st Jun 2010 11:28 am
Dan, Matt did screw up the natural gas prediction timing, pretty badly, as I have pointed out myself, before, on this website. I do not believe he claimed Saudi production “was about to collapse” however..from summaries I’ve read, it was more of “their reserves and ability to ramp up productio are probably overstated and they might be not far from peak” which is a far cry from “about to collapse” His actual errors (NG) are enough without needing to exaggerate his other statements.
JR Ewing on Tue, 22nd Jun 2010 8:29 am
Matt is right on the money. I too believe BP is pulling out of the US as I read they can close down North America and still stay in business. Bankruptcy is their only choice unless they make a deal with one of the big three in China.
BP was downgraded from a $55 target price to $45 by the guru at Oppenheimer. The weird thing is that wall street throw’s everyone under the bus when they smell blood but everyone of them are betting on BP. If it were a Biotech, they would have already shorted them into bankruptcy.