Will Glencore be the Blackstone IPO of the Commodity Rally?

Blackstone‘s 2007 IPO didn’t create the top for the private equity / leveraged buyout orgy but it’s coming marked the top almost perfectly.

The deal was obsessed about on financial television for months, every detail of who was making how much got its own segment.  And then BX opened with a resounding thud.  The stock opened over the summer at 36, dropping to 20 by the end the year.  “Sold to you” said Darth Schwartzman from beneath his black-shrouded hood.  A year later $BX was trading at less than 5 bucks a share.

I bring this up because I am increasingly growing bored of the all-commodity, all-the-time, one-way bull market everyone’s obsessed with.  I’m thinking that, as sexy as the commodity story is long-term owing to demographics and globalization, at some point soon everyone’s going to get their asses kicked.  Maybe it’s the specter of higher rates from the June end of QE2, maybe it’s something even more unexpected, but a correction is likely in the cards this spring.

And nothing would mark this coming commodities correction quite like a massive commodities trading shop going public in a high profile IPO.  Well guess what…

From 24/7 Wall Street:

Swiss-based commodities trading house Glencore International AG is expected to conduct an IPO on the Hong Kong exchange around the end of April. The company aims to raise $10 billion with this offering and one in London. The IPO has been rumored for some time, but difficulty in valuing the company’s assets have drawn out the process.

A ten billion dollar IPO in Hong Kong and London for a $145 billion commodities trading firm.  I’ll check that off the list of signs that a “hards and softs” sell-off is overdue.



Glencore Watch (24/7 Wall Street)

Glencore Said to Study Starting IPO Next Week; Investments Jump (BusinessWeek)



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  1. Will Glencore I.P.O. Mark the Peak for Commodities? - NYTimes.com commented on Apr 04

    […] // The Reformed Broker blog compares the potential public offering of Glencore, the large commodities trader, with the debut of Blackstone back in 2007 — which “marked the top” of the private equity boom “almost perfectly.” Read more » […]

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