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‘The Big Short’ investor Michael Burry who rose to prominence betting against the housing market in the run-up to the 2008 financial crisis has expressed his skepticism over the short-sightedness of governments.
Citing a Wall Street Journal article about Exxon Mobil Corp XOM suing the European Union over its decision to impose a windfall levy on energy companies, Burry criticised the myopic view of governments.
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“Short-sighted is the realm in which all governments operate. But the EU is really demonstrating that there is no natural pendulum forcing a swing from stupid to smart,” he tweeted.
Oil companies have clocked record quarterly profits, benefiting from high energy prices due to the Russia-Ukraine conflict, leading to further calls to tax the sector.
Exxon’s share price jumped over 70% in last one year led by the record profits. Share prices of companies like Chevron Corporation CVX and BP plc BP also rose significantly in the period.
Exxon spokesperson Casey Norton reportedly said the windfall profits tax is “counter-productive,” discourages investments, and undermines investor confidence. “Whether we invest here primarily depends on how attractive and globally competitive Europe will be,” Norton said.
The new tax will take effect from Dec. 31, and apply a levy of at least 33% on any taxable profits in 2022-23 that is 20% or more above average profits between 2018 and 2021.
It’s not just the EU that has taken a hard stand against oil companies. In late October, President Joe Biden had lambasted energy companies, saying that they had a responsibility to act beyond the interests of their executives and shareholders with the “historic” profits made from the surge in oil prices.
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Image and article originally from www.benzinga.com. Read the original article here.