This article has been adapted from  Fool U.K. , our sister site across the pond.

On April 20, 2010, the Deepwater Horizon offshore oil rig, owned by oil giant BP (NYSE: BP), exploded. The incident killed 11 crewmen and left the well spewing oil into the Gulf of Mexico.

BP = big problems
Although BP and its partners desperately struggled to stem the spill, it quickly turned into the biggest offshore oil slick in U.S. history.

Thus, as well as being a personal tragedy for the dead men's families and a huge environmental catastrophe, the spill became a public-relations disaster and financial nightmare for BP. As U.S. politicians -- including President Obama -- roundly condemned BP, its share price started to tank.

Before the Gulf crisis, BP's share price had been climbing steadily to a peak around 650 pence. However, in the two months following the explosion, the shares went into a freefall. 

Amazingly, some panicky financial commentators in the U.S. claimed the cleanup costs would bankrupt BP. Hence, BP shares more than halved, falling from 650 pence to a low of 296 pence, a collapse of nearly 55%.

Buying at the bottom
When BP's share price fell below 3 pounds, I was absolutely stunned. The market value of BP, once the U.K.'s second-largest company, had been slashed from 122 billion pounds to 55 billion pounds. In other words, in a mere 66 days, BP shareholders had lost a total of 67 billion pounds, or 1 billion pounds a day.

To me, this share slide was absurd, and I was firmly convinced BP would bounce back. Hence, on the afternoon of June 25, I wrote "BP Drops Below 3 Pounds," which -- more by luck than judgment -- coincided with the absolute low point for the shares.

In that piece, I wrote, "To me, BP looks a blowout bargain today, but I thought the same thing at 4 pounds, so what do I know?" As time has shown, both my hunches were correct.

BP bounces back
Fast-forward 12 months from that grim day, and what do we find? At the time of this writing, BP's share price was 444 pence, up 148 pence -- exactly 50% -- from the low of June 25, 2010.

Although that's a mighty impressive gain from a FTSE 100 member in just one year, even bigger profits were there to be had. In mid-January of this year, BP shares briefly spiked above 510 pence, producing a 72% gain for crisis investors who bought at 296 pence.

Three lessons to learn
Happily, anyone who took my advice to buy at 296 pence -- and I know a few Fools did -- would be sitting on a 50% profit today. Thus, what lessons can we learn from BP's collapse and rebound?

1. Ignore the PR
One reason BP's share price nosedived was the savage beating its reputation suffered at the hands of U.S. politicians and opinion-formers. Everyone from right-wing Tea Party members and Republicans to left-wing Democratic senators and green campaigners lined up to take a pop at the oil Goliath.

What was most bizarre was the anti-British rhetoric spouted by U.S. politicians and pundits. After all, British investors owned 40% of BP, but U.S. investors owned 39%, so the two countries were sharing this financial pain almost equally.

Also, the absolute destruction of the Gulf of Mexico's ecosystem didn't happen, despite doom-laden warnings from green activists. In short, almost all of the "black PR" directed against BP was pure twaddle.

Therefore, smart investors should always look beyond the headlines for the financial fundamentals underneath.

2. Falling knives are hard to catch
When BP's share price had fallen 25% (to around 490 pence), some folks started to argue that it was a bargain. More "buy tips" emerged as it fell 35% (to 420 pence), 45% (to 360 pence), and 55% (the trough).

Indeed, anyone who bought and held above 444 pence would be out of pocket today. Those unlucky investors who bought at the pre-spill peak of 650 pence are still nursing a loss of nearly a third (32%).

It's been said before, but it's worth repeating: Never catch a falling knife. It's much less risky to wait for situations to stabilize and share prices to rebound before buying in.

3. Size is critical
"Crisis investing" is far, far harder to do successfully with small-cap companies than with blue-chip giants. When micro-cap firms (those worth less than 50 million pounds) get into trouble, they often lose the confidence of their banks and collapse as soon as this support is withdrawn.

However, at the other end of the scale, mega-cap companies such as BP have no problem raising capital, either as cheap loans from global banks, through corporate bonds, or by raising equity from shareholders.

Thus, crisis investors would do well to put a company's size and market liquidity before any other considerations. Otherwise, a crisis investment may turn into a "lobster pot" -- easy to get into, but impossible to exit!

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.