Company Insights on BP, Microsoft, and Western Digital

Company Insights on BP, Microsoft, and Western Digital.. At this time I chose BP AMOCO, Microsoft, Western Digital, Toys-R-Us, and Fortune Financial Incorporated.. After a few weeks of t

Company Insights on BP, Microsoft, and Western Digital

On August 30, we all chose 5 stocks to evaluate before purchasing At this time I chose BP AMOCO, Microsoft, Western Digital, Toys-R-Us, and Fortune Financial Incorporated After a few weeks of tracking these stocks, I chose to keep BP AMOCO, Microsoft, and Western Digital, because the stocks were relatively stable and most of them were on the rise at this time

As you are aware, we were given $30,000.00 to invest in our three

chosen stocks, which breaks down to $10,000.00 per stock We also had

to include a broker’s fee of $500.00 for every $10,000.00 invested

My first stock was BP AMOCO On September 8, I purchased 167 shares at $57.06 per share, which totaled $9,523.00 and incurred a

$476.15 broker’s fee, making the grand total spent $9,999.15

BP is one of Britain’s biggest companies and one of the world’s largest oil and petrochemical groups Its origin dates back to May 1901

BP owes its origin to one man, William Knox D’Arcy, a wealthy

Englishman, who obtained concession from the Muz-affaru'd-Din, Shah

of Persia (1896-1907) to explore and exploit the oil resources of the country, excluding the five northern providence’s that bordered Russia

He, shortly after the turn of the century, invested time, money and labor

in the belief that worthwhile deposits of oil could be found in Persia, which is now known as Iran Having been granted the concession;

D’Arcy employed an engineer, George Reynolds, to undertake the task of exploring for oil in Persia

For seven years, Mr D'Arcy battled with severe weather, the absence of

a developed infrastructure, the shortage of skilled local labor, the

problems of dealing with neighboring tribes in the absence of a strong central government, difficult terrain, and an uncertain political situation These conditions made Reynolds pioneering task an exceptionally

difficult venture Meanwhile, the costs mounted stretching D’Arcy’s resources to the point where e sought outside financial assistance This came in 1905 from the Burmah Oil Company, which provided new funds for his venture

More exploration in Persia followed without success, until eventually, in May of 1908, Reynolds and his helpers struck oil in commercial

quantities at Masjid-i-Suleiman in southwest Persia It was the first commercial oil discovery in the Middle East, signaling the emergence of that region as an oil producing area

After the discovery had been made, the Anglo-Persian Oil Company was formed in 1909 to develop the oilfield and work the concessions At the top of Anglo-Persian’s formation, Burmah Oil Company owned 97 percent of its ordinary shares Lord Strathcona, the company’s first chairman, owned the rest

Although D'Arcy was appointed a director and remained on the board until his death in 1917, he was not to play a major part in the new

company's affairs His role as the initial risk-taking investor was past and the daunting task of developing the oil discovery into a commercial enterprise shifted to others, amongst whom one stands out: Charles (later Sir Charles, then Lord) Greenway Greenway was one of Anglo-Persian's founder-directors, becoming managing director in 1910 and chairman, after Strathcona, in 1914

Greenway, anxious to avoid falling under the domination of Royal Dutch-Shell, also turned to another potential source of revenue and capital: the British government The basis of an agreement to mutual advantage lay in Greenway's desire to find new capital and an outlet for Anglo-Persian's fuel oil; and, on the government's part, in the desire by the Admiralty (then headed by Winston Churchill as First Lord) to obtain secure supplies of fuel oil, which had advantages over coal as a fuel, for the ships of the Royal Navy

After lengthy negotiations, an agreement was reached in 1914 shortly before the outbreak of World War I Anglo-Persian contracted to supply the Admiralty with fuel oil and the government injected $2 million of new capital into the company, receiving in return a majority shareholding and the right to appoint two directors to Anglo-Persian's board

Although the government undertook not to interfere in Anglo-Persian's normal commercial operations, its shareholding introduced an unusual political dimension to the company's affairs In later years, the

government shareholding was reduced and apart from a tiny residual holding ended in 1987

Further expansion followed in the decade after World War I New

marketing methods were introduced, with curbside pumps replacing two-gallon tins for the distribution of motor spirit (or, gasoline)

Anglo-Persian also marketed its products in Iran and Iraq; it established

an international chain of marine bunkering stations, and in 1926 began to market aviation spirit New refineries, much smaller than the plant at Abadan, also came on stream at Llandarcy in South Wales in 1921 and

at Grangemouth in Scotland in 1924 Moreover, the company's

majority-owned French associate had a refinery at Courchelettes, near Douai On the other side of the world, in Australia, a new refinery at Laverton, near Melbourne, was commissioned in 1924

Exploration was carried out not only in the Middle East, but also in other areas, such as Canada, South America, Africa, Papua and Europe

By the time Greenway retired as chairman in March 1927, he had

realized his main strategic goal of establishing Anglo-Persian as one of the world's largest oil companies, with a substantial presence in all phases of the industry In 1935, the company was renamed the

Anglo-Iranian Oil Company

During the post-war reconstruction of Europe, the high demand for oil enabled Anglo-Iranian to expand its business greatly The company's sales, profits, capital expenditure and employment all rose to record levels in the late 1940’s The refinery at Abadan was by this time the largest in the world Moreover, crude oil production from the company's Iranian oilfields kept Iran at the top of the league of Middle East oil producing countries

Meanwhile, Anglo-Iranian entered the field of petrochemicals An

agreement with the Distillers Company in 1947 resulted in the formation

of a joint company, later to become known as British Hydrocarbon Chemicals, which produced basic materials from naphtha at

Grangemouth A second petrochemical complex was built at Baglan Bay

in South Wales in 1961

While the company was expanding its operations in the late 1940’s, it was also engaged in talks with the Iranian government about the terms of its oil concession Long and complex negotiations failed to produce an agreement, and in 1951 the Iranian government passed legislation

nationalizing the company's assets in Iran, then Britain's largest single overseas investment The nationalization precipitated a major

international crisis in which the British and US governments became deeply involved The company's operations in Iran were brought to a halt

Only after three years of intensive negotiations was the crisis resolved by the formation of a consortium of oil companies, which, by agreement with the Iranian government, re-started the Iranian oil industry in 1954 Anglo-Iranian which was renamed The British Petroleum Company in

1954 held a 40 percent share in the consortium

One of the effects of the Iranian nationalization crisis was that the

company was forced to broaden its operations to make good the loss of oil supplies from Iran, on which it had depended Crude oil production in other countries, notably Kuwait and Iraq, was greatly increased; and new refineries were built in Europe, Australia and Aden In another

development, in 1952, the company commissioned its first lubricating oils plant at Dunkirk Two years later, it began marketing BP

Visco-Static, Europe's first multi-grade-oil

Although all of these events were important for the company, it was hydrocarbons under the North Sea and under the permafrost of Alaska that were to play the key role in transforming BP into the company it is today Earlier, in 1959, the Dutch had discovered a giant gas field on the edge of the North Sea at Groningen This discovery encouraged others to begin searching for hydrocarbons offshore BP scored the first success in British waters when, in 1965, it found the West Sole gas field, which it brought on stream two years later The search for oil spread farther north, and in 1970 BP discovered the Forties field the first major commercial find in the UK sector

Meanwhile, in Alaska, BP was rewarded for ten years' exploration effort when, in 1969, it announced a major oil discovery at Prudhoe Bay on the North Slope When it became clear that, through its large share in

Prudhoe Bay, BP owned part of the biggest oilfield in the USA, the company decided that its Alaskan oil could best be handled by a

well-established US refining and marketing company

Accordingly, it signed an agreement with the Standard Oil Company of Ohio in August 1969 This company, the original John D Rockefeller Standard Oil, was the market leader in Ohio and was strongly

represented in neighboring states

Under the agreement, which became effective from 1st January 1970, Standard took over BP's leases at Prudhoe Bay and some East Coast downstream assets that BP had acquired in 1968 In return, BP acquired

25 percent of Standard's equity, a stake that would rise to a majority holding in 1978 when Standard's share of Alaskan production passed 600,000 barrels a day

The 1970’s were the decade of the two great oil price shocks (1973 and 1979/80) that were to have serious effects on the world's economies It was also a decade when the major oil companies saw a decisive change

in their old concessionaire relationships Like its major competitors, BP lost direct access to most of its supplies of OPEC oil as the OPEC

countries took control of production and prices

The 1973 price explosion had a dramatic effect on demand BP's oil sales started falling for the first time since 1952 (with the exception of 1957, the year of the Suez crisis) By 1978, sales had recovered somewhat; but then the Iranian revolution came and another major rise in the price of oil In 1979, BP suffered further blows when its assets in Nigeria were nationalized and its supplies from Kuwait cut back By 1980, its sales were down again

The entire oil industry was affected by the events of the 1970’s But thanks to BP's large investment program in areas outside the Middle East, the company showed as it had done in Iran in 1951, that it could survive As noted, of key importance were the developments of its

oilfield discoveries in the North Sea and Alaska In the autumn of 1975,

BP pumped ashore the first oil from the North Sea's UK sector when it brought the Forties field on stream This field development was financed

by a bank loan of $370 million, then the largest wholly private bank advance ever arranged At its peak, Forties produced half a million barrels a day, equivalent to one-quarter of the UK's daily oil requirement Since the early 1980’s, BP has developed many more oil and gas fields in the North Sea Among these have been, in the UK sector, Magnus

(commissioned in 1983), the Village gas fields (1988), Miller (1992) and Bruce (1993) and, in Norwegian waters, Ula (1986) and Gyda (1990)

In Alaska, meanwhile, the construction of the 800-mile Trans-Alaska Pipeline System enabled the Prudhoe Bay field to come on stream in

1977 In 1981, the Kuparuk field also started production, and towards the end of 1987 the world's first continuous commercial production from an offshore area in the Arctic was achieved when the Endicott field was commissioned

Today, BP's other oil- and gas-producing countries include Abu Dhabi, Australia, Colombia, Norway and Papua New Guinea

The upheavals of the 1970’s led BP to conclude that it should broaden its activities so that it could operate in the future with more balanced

sources of income Accordingly, from the mid-1970’s there was

increased emphasis on diversification into new areas of activity

BP's entry into the nutrition business originated in the 1950’s, when the company's French researchers began to develop a process for converting oil into protein Although the process was later discarded, BP developed other interests in nutrition From the mid-1970’s, it became involved in animal feed, animal breeding and consumer foods and related products

As a result of the purchase in 1986 of the US Company, Purina Mills, BP Nutrition became one of the world's largest feed millers In 1990, it also took responsibility for BP's household cleaning and personal care

products successors of the old detergents business

Another industry, which BP entered in the mid-1970’s, was minerals BP expanded its mineral interests considerably in 1980, when, in what was then the London stock market's largest-ever takeover bid, it bought Selection Trust, the British-based mining finance house In the following year, Standard Oil acquired Kennecott, America's largest copper

producer and a major force in other metals

The mid-1970’s also saw the start of the build-up of BP's coal business

By 1989, about half the group's coal operations were in the US, the remainder being in Australia, South Africa and Indonesia, with some coal trading in Europe

Meanwhile, in the 1960’s, BP had become involved in the information technology industry through its acquisition of Scicon

With a view to the effective management of this now much more

diversified group, the company underwent major restructuring in 1981 The organization that resulted consisted of international business

streams, national associate companies around the world, and, at the center, the supporting services and corporate head office These elements were coordinated by a matrix system of management

Also during the early 1980’s, BP's refining, shipping and chemicals operations were suffering from the effects of industry-wide over-capacity and economic recession Consequently, these activities were thoroughly

rationalized BP cut back its refining capacity, particularly in Europe, so that by the end of 1988 it was left with five main fuels refineries in the region, compared with 16 in 1981

In chemicals, BP had augmented its interests substantially when, at the end of 1978, it acquired European assets from Union Carbide and

Monsanto But the difficult trading environment that emerged shortly afterwards led BP to make severe cuts in its operations Between 1980 and 1984 it closed a number of chemicals plants and withdrew from certain products

The year 1987 was dominated by three historic events in BP's

development: the company's $4.7 billion offer for the 45 percent of Standard Oil it did not already own; the sale by the British government

of its remaining holding in BP; and, as the year ended, the start of BP's successful bid to acquire Britoil, the UK-based oil exploration and production company After acquiring Standard Oil outright, BP

combined its existing interests in the US with Standard's operations to form a new company: BP America The merging of Standard Oil into BP gave the group access to the full potential of the world's biggest market

as well as to Standard's considerable cash flow Today, about one-third

of BP's fixed assets is in the US

When the government came to sell its remaining 31.5 percent

shareholding in BP in October 1987, few could have forecast the

collapse in the world's stock markets that was to occur between the opening and the closing of the offer The outcome was naturally a

disappointment to BP But even if the hoped-for international broadening

of the company's ownership did not fully materialize, the number of names on BP's share register more than doubled to around 600,000 The share sale did attract one large new investor the Kuwait

Investment Office, which, by early 1988, had built up a 21.6percent stake

in BP After an investigation by the UK's Monopolies and Mergers Commission, the government endorsed the Commission's findings that the KIO's holding could operate against the public interest The KIO was therefore required to reduce its stake to not more than 9.9percent of BP's stock In 1989, BP purchased (and then cancelled) 790 million BP shares from the KIO, so reducing the holding

The third major event of the year was BP's bid for Britoil, whose

purchase was completed in 1988 The success of the $2.8 billion

acquisition meant that BP almost doubled its exploration acreage in the North Sea and reinforced its position as the largest oil and gas producer

in the area

After the diversification’s of the 1970’s and early 1980’s BP found like other companies which followed a similar course that it

experienced mixed success in managing its 'new' businesses Towards the end of the decade, in a change of strategy, the company decided to

concentrate on its core, hydrocarbon-based activities To that end, it began a series of divestments In early 1988, BP sold its subsidiary, Scicon, and so withdrew from the computing services industry After developing its mineral interests successfully during the 1980’s, the company sold most of the business to RTZ in 1989 and disposed of the balance during the next few years Similarly, most of BP Coal was sold

in 1989 and 1990 The company did not begin to sell its nutrition

interests until 1992, but by the middle of that year the divestments

program was well advanced

From the early 1970’s, BP's center of gravity has shifted westwards, away from the Middle East where its origins were laid Having

diversified into other industries, the company is now focusing again on its core activities in petroleum and chemicals In 1989, the company launched a campaign to introduce a stronger corporate identity, featuring

a restyled BP shield and an emphasis on the color green And in a

complementary program that was to prove highly successful, BP started

to re-image its global network of service stations in a new design and livery

At the same time, in the quest to find new sources of oil and gas, BP's explorers began to focus their skills more and more on the regions of the world that for political or technical reasons remained relatively

unexplored For example: Colombia, the republics of the Former Soviet Union, and the deep-water areas of the Gulf of Mexico And in all its operations, BP maintained its policy of striving to be an industry leader

in health, safety and environmental standards

To equip itself for the challenges of the 1990’s and beyond, the company introduced, in a program called Project 1990, major changes in its

organization and way of working to improve efficiency and flexibility

To help further in the running of BP, the roles of chairman and group chief executive were split in 1992

A new management, under Lord Simon of Highbury, Peter Sutherland and later Sir John Browne, set tough targets for debt reduction,

profitability and cost cutting

Four years later profits trebled, and BP had managed a turnaround -moving from the bottom of the industry into the top quarter

Then, on December 31, 1998, BP and Amoco completed a $53 billion merger after winning regulatory approval from the Federal Trade

Commission The Chicago-based Amoco was the nation's fifth-largest oil company with 9,300 gasoline stations, and the London-based BP, was the world's third-largest oil company, and sold its products through a network of 17,900 gasoline stations

Now, 97 years after William Knox D'Arcy set off to explore the Iranian desert, the company has transformed itself into BP Amoco, one of the

world's largest oil producers, and Britain's largest company.

The BP Amoco of today is one of the world’s leading oil companies It is

an international company that has operations in seventy countries,

including the U.S., with its U.S headquarters located at 535 Madison Avenue, New York, New York 10022-4212 BP Amoco’s key strengths are in oil and gas exploration and production; the refining, marketing and supply of petroleum products; and the manufacturing and marketing of chemicals

For the first six months of this year, BP Amoco’s turnover rose

81percent to $60.87 Billion Net income according to the U.S GAAP, totaled $5.29 Billion, up from $1.58 Billion in 1999

As I stated earlier, I purchased 167 shares in this companies stock for

$57.06 each This stock now sells for $51.56 a share, which for me means a loss of $5.50 per share Then with the 5 percent broker’s fee of

$430.53 included, equals $8,179.99 This total subtracted from the original money spent of $9,999.15 puts me $1,819.16 in the red

The next stock I chose was Microsoft On September 8, I purchased 136 shares at $70.16 per share, which totaled $9,523.00 and incurred a

$476.15 broker’s fee, making the grand total spent $9,999.15

Microsoft Corporation develops, manufactures, licenses and supports a wide range of software products for a multitude of computing devices Microsoft software includes operating systems for intelligent devices, personal computers and servers; server applications for client/server environments; knowledge worker productivity applications; and software development tools The Company’s online efforts include MSN network

of Internet products and services; e-commerce platforms; and alliances with companies involved with broadband access and various forms of digital inter-activity Microsoft also licenses consumer software

programs; sells PC input devices; trains and certifies system integrators; and researches and develops advanced technologies for future software products

It all started with the dream of "a computer on every desk and in every home." In just 25 years, Microsoft turned this revolutionary idea into a reality, creating a new industry and transforming how we work, live, learn and play

In January 1975 a programmer brought a Popular Mechanics'

advertisement for a microcomputer kit along with an idea to his

friend's college dorm room Their partnership eventually evolved into the world's most valuable company, with a market capitalization that

surpassed $260 billion on Sept 14, slightly ahead of General Electric Corp.'s valuation of $257.4 billion

The boy was Paul Allen The friend was Bill Gates, whom he had met

while they were classmates at the exclusive Lakeside School in Seattle The school was Harvard University and the idea was to build software for the machine The result is Microsoft Corporation, and the rest is history

Microsoft Corporation was founded as a partnership by William H (Bill) Gates and Paul G Allen on April 4, 1975 The word Microsoft first appeared with a hyphen between micro and soft (Micro-Soft) meaning

"microcomputer software" This name was first used in a letter to Paul Allen from Bill Gates to refer to their partnership This name has been used officially after it registered in November 1976 with the officer of the Secretary of the State of New Mexico On June 25, 1981, Microsoft reorganized into a privately held corporation with Bill Gates as President and Chairman of the board, and Paul Allen as Executive Vice President Microsoft became Microsoft, Inc, an incorporated business in the State

of Washington Their business objective was to develop languages for the Altair and for other microcomputers that were bound to appear soon

on the market Thus, Microsoft was the first company formed for the specific purpose of producing software for such computers

The core of Microsoft today centers around five main product lines: operating systems, languages, business software, hardware, and

computer "how to" books

It all began with Bill Gates in 1975 He developed Microsoft Basic interpreter for the first microcomputer while he was an undergraduate at Harvard University in 1975 His foresight into personal computers and continuing improvement has been the essential to Microsoft In 1975 after dropping out of Harvard University at age nineteen, Gates teamed with high school friend Paul Allen to sell a condensed version of the programming language BASIC While Gates was at Harvard, the pair had written the language for the Altair, the first commercially available microcomputer sold by MITS, an Albuquerque-based maker of electronic kits Gates and Allen moved to Albuquerque and set up Microsoft in a hotel room to produce the program for MITS Although MITS folded in

1979, Microsoft continued to grow by modifying its BASIC program for other computers

Microsoft moved to Bellevue, in the Seattle area in 1977, where it

developed software that enabled others to write programs The modern

PC era dawned in 1980 when Microsoft was chosen by IBM to write the critical operating system for IBM’s new PC’s This was Microsoft’s big break Given the complexity of the task, Microsoft bought the rights to

an operating system called QDOS (quick and dirty operating system) for

$50,000 from a Seattle programming, Tim Paterson, and converted it to Microsoft Disk Operating System (MS-DOS) The popularity of IBM’s

PC made MS-DOS a huge success And because other PC makers

wanted to be compatible with IBM, MS-DOS was licensed to over 100 companies, making it the standard PC operating system in the 1980’s

The company then began developing databases, word processors, and other software packages that could run on its operating system

In the mid-1980’s Microsoft introduced Windows, an easier-to-use version of MS-DOS that borrowed from Apple Computer’s point and click Macintosh

Allen fell ill with Hodgkin’s disease and left Microsoft in 1983 He later started his own software company, Asymetrix Today, Allen owns 15 percent of Microsoft’s stock and serves on its board

By 1984 Microsoft’s sales had exceeded $100 million Microsoft went

on to develop software for IBM, Apple, and Radio Shack computers Microsoft went public in 1986 Gates retained 45 percent of the shares, making him the PC industry’s first millionaire in 1987 In 1990, Gates’ paper value surpassed $2 million

In 1992 Microsoft won a key ruling in Apple’s suit over similarities between Apple’s Macintosh interface and that of Windows Windows’ popularity (more than 12 million copies shipped in fiscal 1992) had boosted sales of Microsoft’s business software developed for Windows The FTC then invested claims that Microsoft engaged in unfair practices

to gain dominance in the Windows market

Gates has played an important role in the technical development as well

as the management of the company His significant contribution was so highly appreciated that he was awarded on June 23, 1992 President George Bush awarded Bill Gates the National Medal of Technology for Technological Achievement, at a White House Rose Garden ceremony

In addition, Microsoft Corporation has been awarded in 1992 to 1995 for its recent achievements

Microsoft and IBM teamed again in the late 1980’s to develop the OS/2 operating system That effort’s failure resulted in Gates’ commitment to Windows NT (short for New Technology), as an alternative to the Unix operating system popular on high performance computers Windows NT was introduced in 1993

In the early 1990’s Microsoft first heard charges of “monopoly!” from both inside and outside the industry In 1995 antitrust concerns scotched Microsoft’s $1.5 billion deal to buy personal finance software maker, Intuit, so the company set its sights on startup companies and the

leading-edge technologies they possessed By adding heavy development dollars, and selling the resulting products cheaper than its foes, the company expanded its reach

When the rise of the Internet began to transform the way companies did business, Gates at last embraced the medium In 1996, Microsoft

licensed the Java Web programming language from Sun and introduced