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October 28, 2012

Halliburton and Oil Stock Essay


Halliburton and Oil Stock
Introduction
            The Multi National Corporation or the MNC Halliburton is the second largest oilfield services corporation operating in more than 70 countries providing quality expertise and oil related operations.
With a workforce of over 50,000 people the corporation owns thousands of different subsidiaries, affiliates, branches and divisions all over the world. Headquartered in Houston, Texas the company is currently run by David J. Lesar who is the president, Chairman and the CEO of the company. The corporation has long time been related to Energy Services Group or the ESG which provides technical services for petroleum and natural gas exploration and production.
Halliburton has also been closely related to KBR which was involved in the construction of oil, gas and chemical pipelines and refineries for the company. In 2007 the company decided to break ties with KBR with which it had been working for 44 years. During the course of this discussion we would particularly be focusing upon the fluctuations and the crests and troughs that the corporation went through and the ways through which such changes affected the financial performance of the organization. Furthermore we would also be shedding light upon the controversies and issues that surrounded the company during the most crucial periods of American politics and economy.


Halliburton and the 9/11 episode
            The attack on the World Trade Centre on the 11th of September rattled the social, political and economic foundation of the country, the New York Stock Exchange or the NYSE remained closed from the 11th till the 17th of September. In order to avert the possibility of a financial crisis the Federal Reserve decided to pump liquidity of $100 billion per day for three consecutive days following the attack. In addition to this gold price all over the world skyrocketed from $215.50 to $287 per ounce whereas oil prices also spiked upwards but the surge was not as tremendous as gold in the United States.  
A diagrammatic representation of the steep stock market dip and market crash is shown in the line graph displayed below along with the statements of the then President George W. Bush and Hilary Clinton pushing the whole world into the pits of a never ending and massively annihilating war against terrorism. (Halliburton HAL, 2010)
However on one side where the people of America where on one hand were preparing themselves to gather more resilience in order to endure the hefty back-breaking tax burden that their government was planning to impose upon them in the name of providing them greater security from turban wearing and bearded men especially from Asian countries, the other side of the coin was presenting a completely different and opposite picture. Companies like Halliburton which was interestingly owned by that time Vice President of United States Dick Cheney was able to shield his company from the threats of this disaster prior to its incidence.  For better standards of comparison two tables have been made to outline the differences of price that took place in the stocks of Halliburton.
 Upon analyzing the two tables of 10th and 19th September, 2001 that have been presented it is comprehensibly manifested that the stock market fall that occurred as a result of the 9/11 incident could not pose any serious threat to the stock market figures of the company. Even though the closing price does show a $3slump but such an insignificant change can easily be attributed to the haggard performance of the stock market during that time. In addition to this the split adjustment factor remains the constant, but even if the stock volume going high the company was able to recover it within a very limited amount of time. It is also interesting to note that just one day prior to the incident of 9/11 the former key subsidiary of the corporation KBR was awarded the contract of making concrete efforts for the reduction and non-proliferation of weapons that can cause massive destruction and obliteration on biological scale.
Furthermore it is also important to mention here that during the month of September the company was able to register annual revenue of $13 billion which was greater than $11.9 billion made in 2000.

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