Glencore Company Case Study

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Blog 13 – Are Glencore shares dead in the water?

Back in 2011 if there was any stock that you wanted in your portfolio it was Glencore shares. Time after time Glencore shares have proved their worth, living up to every inch of the 530p initial flotation price. Given the firm’s financial structure and market presence, analysts can be forgiven for earmarking Glencore shares for the top. However, in 2015 matters surrounding Glencore shares would take a turn for the worse, as the company’s fragilities would be left helplessly exposed. As the market would enter a slump in 2015, Glencore shares looked to be the fall guy, as the stock would bottom out in almost every way.

Back when Glencore was a private company many were seemingly awestruck by their performance. They were a name that could do no wrong, that was until the 2008 financial crisis came calling. Hammering the company bottom line, Glencore executives began to look over the edge. In an attempt to restore normal order they looked towards an IPO as a means to raise capital. After absorbing Xstrata into company operations during August 2013,
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No longer standing tall amongst the competition, few companies in the world were hit quite as hard by the capitulating commodities prices. The price of Glencore shares would tumble to record lows, as the company revealed that profits had dropped by almost 30%, a figure that certainly floored many. With such figures hitting global newswires it was evident that Glencore shares were rotting from the inside and something had to be done. Speaking on the moves being made to restore pride to Glencore shares, Ivan Glasenberg (Chief Executive) said, “Against a challenging backdrop for many of our commodities, we have taken a range of pre-emptive actions in respect of our balance sheet, operations and capital spending in order to preserve our current credit
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