MM:Is the Glencore IPO Signaling a Crash in Commodity Prices?
[Editor's Note: The Glencore International AG initial public stock offering (IPO) is scheduled to price today (Wednesday). But as Money Morning's Shah Gilani tells us, the stock may not be the story - it's the market signal that a deal like this sends.]
BY SHAH GILANI, Contributing Editor, Money Morning
Super-secretive Swiss-based commodities trading giant Glencore International AG is going public. The Glencore IPO shares will be priced today (Wednesday) and could begin "conditional trading" in London tomorrow (Thursday).
As currently planned, unconditional trading will begin in London on May 24 and in Hong Kong on May 25.
In spite of all the pre-IPO hoopla, there's actually probably quite a lot that you don't know about Glencore.
If that's the case, don't worry - you're not alone: Columnists and market pundits alike routinely describe the company as "mysterious." To be sure, the Glencore story is a colorful one, and is one of those tales that seems to raise at least as many questions as it answers (For instance, billionaire founder Marc Rich once owned 50% of 20th Century Fox, spent years as a "wanted" man, and was actually pardoned by a U.S. president).
So it's no surprise at all that the Glencore IPO deal raises a whole host of new questions - these two key among them:
Why is Glencore going public right now?
And precisely what does the largest IPO in the history of the United Kingdom means for global commodity prices?
On that last question, at least, I can spare you the suspense: Global commodity prices are going to crash before they rally to new highs.
