Friday, August 21, 2015

Glencore Loses Half Its Billionaires (GLEN.L)

The stock is down another 2% today but weep not for the gnomes of Baar, it's not their fault.
From Fortune, Aug. 20:

This billionaire club just got a little smaller
What the stock market giveth …

The Swiss commodities and mining goliath Glencore closed at a record low on Wednesday after reporting a sharp drop in half-year profits.

That’s just another kick to the face for a company that saw its value tumble from $75 billion in July 2014 to around $32.5 billion now, according to The Wall Street Journal. Since the company’s IPO in 2011, its value has fallen more than 60%.

Now, three of the six billionaires minted by Glencore’s IPO might not be billionaires anymore: the value of their holdings in the company has dropped below $1 billion, according to Bloomberg. Even those who remain part of the Glencore billionaire club might be considering putting their yachts on Airbnb. CEO Ivan Glasenberg saw the value of his stake drop from $9.4 billion in May 2011 to $2.8 billion now, Bloomberg reported....MORE
And From FT Alphaville:

Cultural learnings of stock market valuation for make benefit glorious commodity trader Glencore
When people start worrying about commodity traders in bear markets, the commodity traders themselves tend to reassure the market with comments like: “Ha! This clearly demonstrates you don’t understand our business at all. Lower commodity prices are GRRREAT for us. They liberate our balance sheet on a working capital basis and allow us to focus on our real value add, which is… spread trading.”
Though, if you’re Glencore, you tweak the comment so it goes something like:
“Prices are still not making sense where they are … it’s the funds driving it where it is today, not the actual demand,” Mr Glasenberg argued. “They believe demand for commodities is going to fall and continue to fall and that’s their view. Our view is what we see on the physical movement of commodities and it’s not too bad. We see the flows are still pretty strong.”
Or like this:...MUCH MORE
The thing I don't get is:

They can trade the damn market from either side!
So what's the problem?!?!