The Daily Mail is rapidly becoming the most discredited rumor spreading enterprise in the known universe. As if last week's completely bogus Imax rumor was not enough, today the newspaper is going to town on BP, claiming that Shell is interested in bidding up the name. While we couldn't care loss what the intangible benefit to the tabloid is from spreading these rumors which take about 2-4 hours to be refuted, we are stunned that investotrs, pardon, robots, are so stupid to keep falling for this. Then again, as all robots do now is scan headlines and trade accordingly (the faster the better), this is not really all that surprising. And once the momentum HFT algos are activated, it's off to the races. We cant't wait for Daily Mail to spread the next Radioshack LBO rumor whose sequential number may have as many zeroes a the new US debt ceiling.
Shares in oil major BP hit a six-month high on Tuesday after The Daily Mail newspaper reported rival Royal Dutch Shell had considered a takeover bid during the Gulf of Mexico oil spill.
BP shares were up 5.0 percent to 488.85 pence at 1000 GMT (5 a.m. ET).
The paper, citing sources close to the Anglo-Dutch group, reported Shell weighed an opportunistic bid for BP as crude gushed into the Gulf, but was discouraged by the potentially uncapped legal liabilities.
The newspaper said Shell could yet bid for BP if another suitor emerged but Europe's largest oil company by market value was unlikely to be the "first mover."
Mic Mills, head of electronic trading at ETX Capital said BP was also being boosted by comments late on December 31 from the lawyer running BP's gulf spill oil compensation fund that suggested damages payments could be half the expected level.
We give BP and Shell an hour or so before issuing official denials.