Commodities Trader Loses Exec.

Commodities Trader Loses Exec.

Glencore is the biggest commodities trader in the world.  This article discusses the first significant transition of an executive position in the groups history since its initial public offering last year.  Why this interested me was because this corportation which has done great in the past year due to highly inflated commodities prices is piloted by a 13 executive board.  (one of which they just lost) The position in limbo right now is the seat of the aluminum trading head executive.  Aluminum, which is currently trading at its lowest point in over 18 months, is speculated to continue to drop because it is considered an industrial metal and industry in the grand scheme of things has slowed on a global level. 

Losing a senior executive is detrimental to any company regardless of size.  Losing a senior executive responsible for a highly volitile commodity that is not doing well is even worse.    The stock is currently trading 23% lower than its IPO and if Glencore’s current executives and take on the issue head on they may be able stop the bleeding, if not the stocks price will plummet.  Now what leads me to question is that, because aluminum is not selling due to a dismal global manufacturing market who is not to say that this exec didn’t abandon ship before it tanked?  And if so how does this reflect on the corporation? It will likely result in trust lost in the stock temporarily, but what are the long term ramifications?

 

Article derived from:

http://news.yahoo.com/glencore-executive-first-key-departure-since-ipo-report-045611772.html

One thought on “Commodities Trader Loses Exec.

  1. The market of commodities is a tough market to stay in due to the nature of the business itself before anything else. All what it takes for a company to loss its position might be as small as a fraction reduction the in the price of the commodity they are trading in.
    The commodity in questions here is Aluminum which my country deals in largely and it is as per what you mentioned. Sales are at its lowest points for about seven quarters now. Some of the changes I have noticed in this company is that they have reduced the size of their workforce and shutdown one of their major production lines for several months. Some analysts seem to project that this will take a while before the market goes back to its normal rate per ton which is around USD 2,200 per ton. The worst rate was around USD 1,500 and the best was around 3,000 for my country and for now it is being sold around USD 2,000.
    I believe that this goes right for most companies in the market. When they fire one of their top executives the market would most likely question why and that will follow a reaction of low faith in the operations of the company. For the public that will reflect a reduction in the stock of the company. All of which have happened to some degree in ALBA in Bahrain last year.

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