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The claim that firm XYZ is the "biggest company you've never heard of" is overused. But in the case of commodities giant Glencore it might just be true.
And over the last week its shares have been on a rollercoaster ride, the like of which rarely happens to multi-billion dollar companies.
One week ago shares in the company lost a third of their value on the back of almost no real news, only to recover the loss in the next four trading sessions.
This is the kind of thing which really just isn't supposed to happen.
Glencore is listed on the stock exchange in London and Hong Kong but based in Switzerland - where I spent a couple of days last week digging into this story.
It employs around 180,000 people and operates in more than 50 countries.
It is usual at this point to note that it has more ships than the Royal Navy but that perhaps says more about the size of the navy than the size of the firm's fleet.
What makes Glencore unique and interesting - and has added to investor worries over the past few weeks - is the fact the firm is both a commodity miner (digging metals out of the ground globally) and a commodity trading firm (buying and selling raw materials for its counterparts).
The company was privately owned for decades before listing on the stock market in 2011 (a deal which made many employees, on paper at least, fabulously rich).
In 2013 it acquired mining company Xstrata, creating one of the biggest players in global commodity markets.
But if the last week has been a rollercoaster for shareholders, the bigger picture since 2011 has been of a big-dipper, with the shares that once traded at over £5 trading at around £1 today. Last Monday they were briefly closer to 70p.
Despite talking to people familiar with the company itself - investors, analysts and traders - over the last few days, I've yet to hear a convincing argument as to what drove last Monday's huge sell-off.
Mr Glasenberg's model was based on expanding the huge merchant of oil, coal, metals and grains into production by borrowing over US$30 billion (S$42.9 million) to buy coal and copper mines.
The idea was simple: In commodity price booms, coal and copper generate huge returns. In downturns, trading would pay the bills as it thrives on market volatility.
As mining normally generates three-quarters of Glencore's earnings, trading was mostly ignored by the market after Glencore's record US$10 billion share placement in 2011. But as commodities began sliding last year, trading came under the spotlight.
"Trading is often similar to betting. Glencore has done it well for decades and they have one of the most talented teams. But to actually guarantee certain performance for trading is a bit brave," said a top executive at a rival.
Glencore market jitters focus on a straightforward dilemma: Will it earn enough to service its debt when China is cutting its use of coal and copper?
The stock tanked 29 per cent on Monday but has since clawed back most of the losses.
http://www.bbc.com/news/business-34446634
And over the last week its shares have been on a rollercoaster ride, the like of which rarely happens to multi-billion dollar companies.
One week ago shares in the company lost a third of their value on the back of almost no real news, only to recover the loss in the next four trading sessions.
This is the kind of thing which really just isn't supposed to happen.
Glencore is listed on the stock exchange in London and Hong Kong but based in Switzerland - where I spent a couple of days last week digging into this story.
It employs around 180,000 people and operates in more than 50 countries.
It is usual at this point to note that it has more ships than the Royal Navy but that perhaps says more about the size of the navy than the size of the firm's fleet.
What makes Glencore unique and interesting - and has added to investor worries over the past few weeks - is the fact the firm is both a commodity miner (digging metals out of the ground globally) and a commodity trading firm (buying and selling raw materials for its counterparts).
The company was privately owned for decades before listing on the stock market in 2011 (a deal which made many employees, on paper at least, fabulously rich).
In 2013 it acquired mining company Xstrata, creating one of the biggest players in global commodity markets.
But if the last week has been a rollercoaster for shareholders, the bigger picture since 2011 has been of a big-dipper, with the shares that once traded at over £5 trading at around £1 today. Last Monday they were briefly closer to 70p.
Despite talking to people familiar with the company itself - investors, analysts and traders - over the last few days, I've yet to hear a convincing argument as to what drove last Monday's huge sell-off.
Mr Glasenberg's model was based on expanding the huge merchant of oil, coal, metals and grains into production by borrowing over US$30 billion (S$42.9 million) to buy coal and copper mines.
The idea was simple: In commodity price booms, coal and copper generate huge returns. In downturns, trading would pay the bills as it thrives on market volatility.
As mining normally generates three-quarters of Glencore's earnings, trading was mostly ignored by the market after Glencore's record US$10 billion share placement in 2011. But as commodities began sliding last year, trading came under the spotlight.
"Trading is often similar to betting. Glencore has done it well for decades and they have one of the most talented teams. But to actually guarantee certain performance for trading is a bit brave," said a top executive at a rival.
Glencore market jitters focus on a straightforward dilemma: Will it earn enough to service its debt when China is cutting its use of coal and copper?
The stock tanked 29 per cent on Monday but has since clawed back most of the losses.
http://www.bbc.com/news/business-34446634
