If all else remains unchanged, it’s going to be back to the drawing board – analyst.
For a while it looked like Glencore had turned the tide.
Billionaire chief executive officer Ivan Glasenberg’s $10 billion debt-cutting plan, vivified with asset sales and output cuts, breathed life into a collapsing share price. Now with the stock falling again, pressure is back on to drive those efforts harder and faster.
The Swiss firm has fallen for the past 10 days straight in London, the longest streak on record. That 31% slump, as prices for the copper and zinc that Glencore produces reached six-year lows, wiped about $8 billion off the mining and trading company’s value.
“If all else remains unchanged, it’s going to be back to the drawing board,” said Marc Elliott, the mining analyst at Investec whose bearish research note seven weeks ago was a spur for a record daily decline in Glencore’s shares.
“Perhaps not to the same degree, but they’re going to have to take more action.” Elliott advises investors to sell.
Glencore has lost $46 billion in market value this year amid a commodities rout that’s crushing prices from aluminum to oil and tin, and presenting Glasenberg with his greatest challenge since becoming CEO in 2002. While he’s hitting debt-cutting milestones — a $2.5 billion share sale, a $900 million asset disposal, $2.4 billion saved by halting dividends, progress offloading a stake in its agriculture business — the question is whether tumbling demand in China, the biggest commodity consumer, won’t overcome all endeavors.
Glasenberg leaped one hurdle on September 28, when the stock tanked 29% as Investec questioned whether weak metals prices would erase Glencore’s equity value.
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