Glencore Internal Stock Price Drops After IPO

The other IPO this week was Glencore International (GLEN.L). It was slightly overshadowed by the hype surrounding the Linkedin IPO.

Glencore International is a commodities producer and marketer. Glencore operates mines and processing plants. It was founded in 1974 and its HQ is located in Switzerland.

The IPO was set to raise £6.8 billion on the London and Hong Kong markets and is due to be the biggest IPO of 2011.

Glencore International was the world’s 6th largest company in terms of turnover. Glencore supplies metals, minerals, oil and coal products as well as being involved in agricultural, automotive and power generation. It employs over 50,000 people globally.

Considering that the commodity markets are looking confident at the moment Glencore’s early trading figures are looking rather sluggish.

Glencore Share Prices Drops

Glencore IPO valued the shares at 530p which is the mid-point of the 480-580p range that Glencore originally set. They began conditional trading* yesterday (19th May 2011) at 547p. However today they dropped back to 530p as traders and fund managers are uncertain over the true value of the stock. By lunchtime Glencore had dropped further to 525p.

Glencore’s market value means that it will go straight into the FTSE100 index.

Glasenberg and other existing shareholders will control about 80 percent of the company after listing (Reuters).

*conditional trading refers to the trading of new shares before they officially enter the stock exchange.

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