May 18, 2009 Ali Eftekhari
XOM chart in 15 years - Ali Eftekhari
Almost all companies in the stock markets (more of less) failed as a result of the economic recession. Although it was an unfortunate even in all financial markets, it seems that such brake was necessary for some companies like ExxonMobil Company. First of all, it should be emphasized that this statement is merely based on a mathematical analysis, not the company performance.
ExxonMobil
ExxonMobil, an American oil and gas company, formed on November 30, 1999, by the merger of Exxon and Mobil. According to either revenue or market capitalization, ExxonMobil is the world's largest publicly traded company.
As the largest of the six oil supermajors, Exxon Mobil had a daily production of 3.921 million BOE (barrels of oil equivalent) in 2008 (i.e. approximately 3% of world production). ExxonMobil has been accused by major scientific organizations of waging a misinformation campaign aiming to create uncertainty on the issue of
ExxonMobil in Global Recession
In an earlier articles (A different face of recession: an analysis of Wal-Mart) it was shown that the economic recession had no significant influence on some companies in the stock market. Here another extraordinary case is introduced. From 1994, the price of ExxonMobile (XOM) shares from around $15 was increased to $96 in May 2008. According to the chart, this increase has been monotonic, except a weak halt in 2002.
When looking at the chart up to mid 2008, one would ask “where does ExxonMobil go?”. In the absence of the economic recession, ExxonMobil could reach a price of ca. $110 by now. The current recession braked this monotonic increase, but probably it will be started again after the recession (or maybe during the recovery period).
Definitely, this success is related to the company performance, but mathematical aspect of economics usually predicts more price oscillations in a financial market. This is the reason that such brake was not unusual from a mathematical point of view, since the price of ExxonMobil was unusually increasing in a monotonic trend.
In the case of ExxonMobil, the drawback caused by the economic recession was not something noticeable. The chart from the late 2006 to date shows a perfect parabola. In other words, the rate of rise and fall of the XOM price is the same. In other words, the chart just shows a perfect cycle, which is a common behavior in the stock market (though usually not perfect).
References
Exxon Mobil Corporation Announces Estimated Record 2008 Results, Official report.
