Chief Executive Ivan Glasenberg and his band of traders ran the commodities behemoth with swagger. 2015’s plunging metal prices and company stock forced them to enact a rescue plan that’s still playing out.
“Are you sure this is the right thing to do?”
Ivan Glasenberg, chief executive of commodities behemoth Glencore, asked the question again and again. His underlings and advisers, hastily summoned to their company’s Baar, Switzerland, headquarters one year ago, reassured and debated with him as he kept asking: Is this right? It was a rare moment in which Glasenberg was circumspect in front of his team.
The 59-year-old CEO has a reputation as the shrewdest, boldest leader in his industry—not just the proverbial smartest guy in the room, but in the entire world of copper, coal, oil, aluminum, and wheat. On that Sunday last year, Glasenberg led a company with about $170 billion in annual revenue, 160,000 employees, and a market value of $26 billion. With operations on six continents, Glencore supplies grains for breakfast cereal, cotton for T-shirts, power for homes, and copper for pipe and electrical wires.
Glasenberg is the guy whose company once goaded Russia into capping its wheat exports, then made a bundle on futures positions secured before the price rose. The guy who bought up coal mines in the early 1990s when nobody else wanted them, and made billions later as demand in developing countries surged. The one who sought the $10 billion stock offering that made Glencore a public company—and himself a paper billionaire—in 2011. (Peter Grauer, the chairman of Bloomberg LP, is a senior independent non-executive director at Glencore).
But the summer of 2015 hadn’t gone well for Glasenberg. Growth in China, the world’s biggest commodities customer, had slipped. Copper and other metals prices were plunging. Glasenberg shrugged it off in August when Glencore announced a big drop in first-half profit, insisting everything would be swell. The market then shredded Glencore’s stock, pushing it down by almost 10 percent.
Glasenberg, unaccustomed to being so roundly ignored, fumed privately about the hedge funds that were shorting Glencore stock. As he saw it, they didn’t appreciate China’s long-term prospects or Glencore’s long-term view. To Glasenberg, the funds just wanted a quick payoff and they didn’t mind pummeling his company to get it.
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