Friday, June 19, 2009
Glencore Execs: Show me the Money
I never thought I would hear these words: 'Glencore explores market flotation'. Glencore, the uber-secretive, hyper-profitable offspring of Marc Rich, wants to become a public company. With analysts and stockholders and regulators looking down its throat for possible cancerous cells? I don't think so. Glencore makes its money by being more nimble than the next guy, quicker to find a niche market. This is almost impossible to do if you are a public company. The methods necessary to do business in oil, metals, and other 'frontier' physical commodities markets are not appropriate for public companies, no matter where they are listed these days. (Even the Swiss regulators are getting more conscientious about the activities of their brood.)My sources say this flotation idea may have been been 'leaked'. During the credit crisis, when Glencore's credit default swaps went through the roof due to concerns over its liquidity, the partners decided to substantially defer bonuses and so-called cash-ins. Glencore employees get most of their bonuses as a cash-in payoff when they leave. If they leave today this cash-in will reportedly not happen for some years. It looks like someone wants his money now.