Twitter worth more than Glencore
Twitter Valuation: 17.08 Billion
Glencore Valuation: 9 Billion
Twitter Revenue : $1.4 billion
Twitter Net Income: -500 million
Glencore Revenue: $222 billion
Glencore Net Income: $2.3 billion
The world is coming to an end ? Or is this just hedge funds raping Glencore via shorting ? A few years ago I thought Ivan Glasenberg was an evil genius from a James Bond movie - private jetting around the world, dining with Arab Sheikhs, buying concessions from dictators, all while sitting on a throne that made him and his G gang the undisputed rulers of the seven seas and global commodity and resources, every word that came out of his mouth only launched the stock price into a higher orbit, he seemed infallible along with the entire commodity sector.
Now the share price is almost 7 times less than its peak at 2011. One can only wonder whether the world is coming to an end when a goliath like Glencore is worth less than a dot com that never made a penny of profit.
WHAT IS HAPPENING !? Caterpillar records low sales, oil is at $43, Glencore is in the ICU/ER - is the world coming to an end ?!! I wonder whether the top management has sold their shares way back, they sure missed out on a great opportunity if they didn't.
Some unnecessary pics I thought would add some color to the thread.
The mastermind - whose mortality and invincibility was questioned until now:
http://www.bloomberg.com/image/inI6OrnpxxR4.jpg
Yes, Glencore is seriously fucked. Glasenberg still a G though.
If he manages to save Glencore from doom now that would prove how much of a G he is. It's ironic how fortunes turn. A while back I thought the guys running giant consolidated companies with massive upstream/mine assets were geniuses for managing cost of product - now it looks like the Trafigura guys and other mostly trading only guys are geniuses.
It's still scary though, regardless of how much of a G Glasenberg is/was. I thought he was the most infallible CEO, right up there with Steve Jobs and Gates, if Glencore and Glasenberg can fall my trust in this world economy and financial markets will never be the same. I thought for sure there were companies that were bulletproof, run by bulletproof people.
Not quite sure what the point of the twitter comparison is, equity value is just that: equity, enterprise value is a much better measure if we are going to be comparing.
Also Glencore is a bull market business. SHouldnt be shocking how much of "genius" is actally just being levered long a bull market.
The shares are up 15% now. Worth $11.32 billion currently. Shorts covering or genuine longs ?
Traf is in as bad a position if not worse than Glencore. Everyone is bottom line they got way too greedy and bought way too many assets and way too much shit. Comparing to twitter makes no sense two totally different businesses and you really need to understand how Glencore makes their money. As well I have always said and will continue to say the people who praise Glencore/Traf etc on here like its godly and their management being G's etc...its insane all these firms have some good businesses and some bad ones. The major issue they are all seeing now is they got greedy and grew their non-core competency businesses way too fast. As well I will never get why a trading firm likes to go public and open up their books, I guess it made the dude a multi-billionaire and now hes lost most of it back again.
The only reason I made that comparison was because I thought it was pathetic to have a company with a quarter trillion in revenue with herculean political and economic power internationally be valued at a sum that makes it seem more insignificant than a dot com started in 2008.
I can never understand for the life of me why the markets never factor in management, competency, and customer base. As far as the elevation of management - it's not just me or the site members I read an article today in the WSJ where an analyst claimed Glasenberg was built to battle crises like these and ad verbatim the article said "he is made of stern stuff".
Again, you are disregarding debt...
But doesn't Traf mainly have midstream assets? Also, do you think Glencore could go bankrupt or get bought out, etc?
Who do you have in mind that could buy out Glencore?
Ivan Glasenberg is an alpha male. I'm sure he has this under control. A few asset sales should take care of the debt situation.
It's funny how everyone lent when the commodity prices were high, now in retrospect they sit in their offices and pontificate about how nobody was prudent about the cycles - as if they were completely oblivious of the fact that commodities is a cyclical business when they were lending around 09 to 2011
Since 2007, Central Bank policies globally worldwide have created a boom and bust in commodities markets. They made lending basically free and that allowed commodities to run much faster than was ever needed.
When you push valuations to the levels they were and make lending free you also mess with the investment cycle, so now you have a lot of available excess supply to shave off peak demand periods (example, US shale oil).
I repeat they all got uber greedy at the top of the market cuz money was free and when it became not free their margins cannot sustain the debt loads. So now PE/SWF types have to step in which are looking at a 10 year cycle and not an 1 or 3 year one with uber deep pockets.
Damn good analysis Sir ! That's exactly what the CEO of a major commodity producer said on a recent Bloomberg interview. You nailed that like a hammer.
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