Later next month, Glencore will go public in an IPO that is expected to raise as much as $11-12 billion, giving the commodities firm a potential market value of between $55-73 billion. It’s multiple exclamation point exciting, not unlike Fortress’s hernia-inducing IPO of 2007. As part of the buildup to the big event, there’s been a demand for insight into how Glencore, founded in 1974 by Marc Rich and currently run by Ivan Glasenberg, got to where it is today and what it looks like on the inside. One theory currently being floated is that it’s a cult. Continue reading »
Commodities
RIP Hongjuo Seo. Continue reading »
McDonald’s Corp said it would selectively increase menu prices this year to help offset an expected rise in its own grocery bill for the 10 commodities that account for around 75 percent of its food preparation costs. Food prices are climbing around the globe and the world’s biggest restaurant chain said its costs are expected to rise this year 2 percent to 2.5 percent in the United States and 3.5 percent to 4.5 percent in Europe. Chief Financial Officer Pete Bensen said McDonald’s would “raise prices where it makes sense” to offset some, but not all, of the cost increases. [Reuters]
A Columbia business student recently sent out an email peddling billions of dollars of iron ore to his classmates, pitching them and anyone they might know on the deal. It’s unclear how much money has been raised so far, but we figured we’d help cast a wider net. If you’re interested– get in touch!
From: [redacted at Columbia Business School]
To: All Students
Subject: For Sale: $13B of iron ore, +$10B of rare earth elementsI’m actually serious. This is a deal that I’ve put together.
Bloomberg reports the firm “told traders who bet on commodities for the firm’s account that their unit will be closed as the company begins to shut down all its proprietary trading” and will “eventually end all proprietary trading to comply with new curbs on investment banks.” In July JPM axed about 40 prop traders and earlier this month, Blythe Masters told the commodities unit to calm the fuck down, assuring them that “no one’s going to get screwed. We’re not going to do crazy things on compensation at the end of the year.”
Morgan Stanley commodities chief John Shapiro has decided to follow Michael Lewis advice about what “the really shrewd people” do when times get tough on Wall Street. They “abandon the big firms for which they have happily worked for many years, and sneak off,” according to Lewis.
Shapiro is stepping down from his positions as the head of Morgan Stanley’s huge commodities trading desk. He’s been with the firm since 1984, and gets credit for building its energy-trading business. But lately Morgan Stanley has seen a sharp decline in revenues from commodities. Shapiro’s surprise retirement will inevitably be read as a signal that things haven’t improved.
As the Wall Street Journal tells it:
The firm recently said a decline in commodity revenue from the first to second quarter of this year was due in part to wrong-way bets in the power sector. But a person familiar with the matter said the overall commodities business in the first half of 2008 is running on a par with the first half of the prior year.
Writing on the wall seen.
Morgan Stanley’s Shapiro Resigns as Commodities Chief
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