We would love to hear your thoughts about our site and services, please take our survey here.
So I go to the trouble of posting two lengthy messages, as someone who has followed GLEN.L carefully more or less since it listed, explaining why it would be a seriously bad idea to buy it as a LONG TERM hold. Both posts were clear as a bell that that was what I was opining on. Because that is what Nosesseignotum specifically asked for views on. (As I read his original post on Friday. I don't see any other way to have read it).
To which we get someone explaining to me that "miners are cyclical" and someone else chiming in that you can make money out of GLEN.L by trading in and out of it. What a pair of geniuses.
And Nosesseignotum replies by saying effectively, "Yeah but what if all those really serious defects with GLEN.L that you sagely point out - and that have yet again destroyed the share price this year - magically disappeared? Wouldn't GLEN.L be a good long term buy then?" Yep, it would be buddy (well - if they all disappeared AND if it also wasn't a miner and hence will likely always suffer repeated cyclical convulsions in its share price anyway). My auntie would be my uncle if only she had a pair.
You obviously aint going to be told - so I really don't know why you bothered asking - so plough your money in.
F*ck me.
Nosesseignotum, I just want to make sure you understand - do not think you will EVER make money from GLEN.L long term, it just will not happen. IN fact the longer you hold the more likely you are to be left holding the baby after yet another near wip-out plunge. Over the last 3 years, commodity prices have soared into sheer dislocation levels, GLEN.L has booked three years in a row of profits far above anything it has ever achieved in its listed history and doled out phenomenal distributions off that back of that - and despite all this the share never did anything better than move up fleetingly above what it listed for in 2011! Then promptly collapse back ceaselessly by 36% and counting over 14 months. It is now back to a price below where it was at in January 2018 and I stand to be corrected but it earned then a fraction of what it just earned even in 2023 as commodity prices fell back. Look at the long term chart. The market simply does not value the company, the share price repeatedly collapses. It has taken me a long time to recognise and accept that the share is nothing more than a play thing for short term investors, with shorters constantly holding sway and seizing on any transient upwards movement to haul it down by levels no blue chip investment should ever move around by. Seriously, find some other target to put your money in if you are looking for somewhere to invest, rather than to trade in a and out.
The dividend is also destroyed not just for this year but likely for several years now, through appalling mismanagement over the last 12 months that has caused net debt to blow out just when it should have been being managed ahead of the EVR purchase. Which means the supposed windfall spin out of the coal business is now also unlikely to occur any time soon - read the results announcement from Wednesday - because the Board has resolved that that will not happen until net debt is brought down into a certain range. Which as matters stand will only be achieved now by withholding any meaningful level of distribution of profits for several years.
Nosesseignotum are you trolling with your question below? I ask because:
a. This board is attracting plenty of such d*ckwits and assorted fantasists at the moment; and
b. You would have to be an utter clown to put money into GLEN.L as a long term investment.
The share price repeatedly gets yanked down 20 - 30 %, usually precisely at a time when no sensible retail investor would see any sign of that being likely. (I dare anyone to show me a post where they predicted this share turning utterly without warning at 5.83 last January, or immediately losing another 20 % on top again this year, starting the very first day of trading and going down more or less ceaselessly since. Don't show me posts after USB let that stench out of the bag that the dividend was going to be destroyed. A monkey could see what was going to follow from that point.)
If you want to buy into a share that has now endured a pretty much ceaseless decline over 14 months of circa 36%, all whilst the company has been paying out record sums; has announced a supposedly value-transformative acquisition; and still posted its third highest EBITDA ever this week, dive right in mate. You would have to have a very optimistic view of how anything would ever drive this share up meaningfully again at this point.
If you are still tempted though, I would also just flag for you that GLEN.L has twice since it listed collapsed to near complete wipe-out prices that make what has happened since last January look like a picnic.
The fact that it suffers these violent price movements is highly abetted by repeated appalling management decisions - such as destroying the dividend this week. Because they let net debt blow out to £4.9 bn in the last year from nearly zero, wholly behind investors' backs until owning up to it this week. In large part by carrying on with more f*cking stupid share buybacks, despite being well away that commodity prices were retracing.
Worse, they have done so at a time when net debt is now going to have to increase even further to fund the EVR takeover. Which they have now revealed means the combined coal business will likely not be spun out any time foreseeably. The whole point of buying EVR i the first place! What a triumph - a "transformative" acquisition that a. has thus far destroyed the share price by roughly 20 %; b. has also now taken away any dividend incentive for investors to stay in or enter the share for the foreseeable future; and c. will unlikely lead to a coal spin now out any time soon in any event.
(Ps - I am well aware they are actually "distributions" not dividends. Let's not have any more silly posts on that please.)
Plus you may want to consider the fact that the FTSE has it seems now been reduced essentially a dogsh*t sideshow alley for short sellers. Other stock markets are roaring, the FTSE just keeps falling. Difficult to see what would change that any time soon
Ps GoroMajima - yes a company buying back its own shares and then cancelling them does seem intuitively to amount to someone buying something then throwing it straight in the bin. I spent years in law school, share buybacks never featured. So when I then first encountered them working as a lawyer that was my reaction. That is not what is happening though - it is just a company returning capital to shareholders. You give them their money back, they hand you back their share certificates (or vice versa). Once you've done that you can bin (cancel) the shares or put them in treasury, it makes no difference.
GoroMajima, for most people share buybacks are not easy to get a handle on. When a company "buys back" some of its own shares that definitely DOES affect what is in circulation. What the company is doing in effect is reducing its issued share capital - i.e. by returning some of it to the shareholders who elect to sell shares back to the company. (In the case of a listed company it buys back shares by just wading into the stock market and buying them like any other participant. )
But what you are then left with is essentially a commercial/legal nonsense - a company cannot own shares in itself.
So when a company does this it will then either cancel those shares out of existence straight away, or do what is called "putting them in treasury". Which means the shares still exist legally - but they are if you like "zombie" shares, they are not currently issued to and hence owned by anyone and the company has not taken in any capital from anyone for them.
The company could then decide to re-issue them again at some future point, at such price as it thinks fit. So increase the total shares in circulation again. Or, as GLEN.L has done recently it seems go ahead and cancel them out of existence after all.
In short, all that has happened recently is GLEN.L has done some legal housekeeping by cancelling some treasury shares that it presumably bought back some time ago, to keep the total number of treasury shares at a preferred figure.
I cannot see how anyone could think that would have any bearing on the company's share price. (Nor should buying back shares in the first price frankly if the company has paid fair market value for them. The theory that GLEN.L management seems to want to try to fool investors with by engaging in share buy backs is to say, "Look at us, we are buying our own shares back, so a. aren't we sh*t hot at managing our company, we don't need as much capital any more but we can still make the same profits; and b. if we are buying back shares now we are doing so because we think they are an under-valued bargain". As far as I can see neither has ever fooled anyone into bidding the price of GLEN.L shares up in response. )
Shares sitting in treasury therefore should not factor into the price at which shares in the company trade. A company can in theory hold a board meeting any time it likes and resolve to create a trillion treasury shares if it wants to. Until it actually issues those shares for a price they should have no bearing on the market price at which the company's shares trade.
Part 2/2. The last words were cut off in my previous post. People will get the draft - cancelling treasury shares should have no impact on share price.
As evidenced by this share resuming its bullsh*t yo-yo trajectory again over the last three days, as it continues the slide that started three weeks ago now, after any positive effect from the Teck announcement last precisely two days.
On which, can I just say finally that one of the responses to my recent posts was to claim that I think this share should perform as a “capital growth” share. I trust it will be evident by now that I am not a moron. My whole point of coming on here is, on the contrary, to warn people that this share has had over a decade now just to establish itself as capable of trading in a fair price range reflecting sensible valuation metrics. (I understand obviously that any such range will be wider than most shares given it is a commodity share.) It never has, other than getting close fleetingly last year/Jan this year.
On the contrary it has twice fallen to near-death levels. A FTSE 100 share losing 90 % of its value, despite still being a plainly viable and ultimately profitable ongoing concern, is not “volatility that comes with the territory for a commodity share” as some idiots on this forum seem to think. It is an horrendous episode of grotesque failure of corporate governance that will have ruined many investors’ lives.
My point coming back aagin recently was to say that if Teck did not provide a basis for a meaningful re-rting of this share at last, which it has not done, then I am lost now as to what ever will. ‘Cos I have been hearing for years now that coal was the millstone around the share price’s neck. GLEN.L management has tried ever rabbit. None has ever worked. And now ditto Teck.
I was not planning to put my head up here to have it shot off again with abuse etc. this soon but may I just answer GoroMajima please about the treasury share cancellations, and say something broader about share buybacks.
First, let me make a disclosure that may make people a bit less inclined to question whether I know what I am talking about or have some agenda. I am a retired City solicitor (Magic Circle). I left my work there very early in life following a serious medical episode and hence have had to self-fund my life ever since. As part of that story self-evidently I have strong views about GLEN.L.
As a lawyer I used to advise companies of the same ilk as Glencore about corporate governance issues. On that basis my informed view is that in most cases - other than e.g. a genuine decapitalisation of a business as part of a major change of direction or the like - share buybacks are sheer bullsh*t. In this company’s case they are never-ending and they have as far as I can see never achieved anything positive for the share price. In 2015 the company’s irresponsible practice of engaging in them - apparently to try to pump the share price so as to try to con people into thinking the listing had not been an utter failure after years of the shares failing to get back to anywhere near the listing price - left the company vulnerable to near collapse when shorters induced panic by claiming the company did not have adequate capital to weather a transient commodity price crash.
So what happened next? Ivan Glasenburg then issued himself nearly 10% of new shares in the company at an outrageously low price (£1.25 as I recall), without making any offer to market. Then in no time the company, outrageously, resumed and has continued ever since with buying back shares.
If the company thinks it has surplus capital it should pay all of it, to all shareholders equally, as capital distribution.
Separately, people have argued with me before on this forum about treasury shares. Shares held in treasury are - in my informed view as a former corporate lawyer - a complete “nothing” for share price purposes. They are simply shares that the company has bought back but not formally cancelled fully out of existence. (Or shares created potentially for issue but never actually issued). I have heard people argue on this forum that therefore they remain part of the company’s overall share capital and hence the share price will reflect them. The former is technically correct; the latter is in my view just nonsense. The share price should only reflect the total shares on issue. (If the company were wound up would it owe any return of capital to anyone on the treasury shares? Obviously not. So why would they factor in the value at which shares in the company trade.) Cancellation of treasury shares is simply corporate governance “housekeeping” to wipe them fully out of existence. That should have no impact whatsoever on th
Final points before I disappear again for a few years. Obviously I don't see anything positive about this share being at around 450. So what if that is a significant improvement on the 170 it was seemingly at when I last posted, presumably during the Covid crash. 170 (let alone the 50 pence or so it fell to in 2015 as I recall) constitutes an utterly catastrophic loss of fair shareholder value, life-destroying for many. So plainly that is not any sort of yardstick to expect someone to base comment against. The yardstick is this:
a. This is a publicly listed company, trading on the FTSE 100. So investors are entitled to expect sound share price performance. Not repeated episodes of near complete capital wipe out, which this company has twice delivered now;
b. The share listed, over a decade ago now, for 533.
How could anyone conceivably think a share price of 450 merits positive comment in that context? Or given that it was at 583 in January - i.e. finally approaching what I would consider a fair bail-out price for anyone who has endured holding it long term. Upon which it turned viciously and collapsed again by 30%.
Why would I feel any impetus to post something positive when it finally went over 500 last year for the first time since listing. Wow, what a f*cking achievement - it was finally edging close to returning investors their capital after over a decade.
Daytradenovice I don't want to engage in petty point scoring. Just to be clear though when I posted yesterday the share was trading at 447. and had been at 445. an hour or so earlier. That is plainly "mid 440s". It bounced slightly late yesterday though as is almost always the case with GLEN.L some of that was then dumped out in the last 90 minutes of trading - another persistent problem with the share. And obviously it is gone again today.
I have no agenda. As I say I come on this board very periodically for a sounding and to hopefully to impart some knowledge as someone who has known the share well now for over a decade. If I had an agenda I would be pushing it in a far more effective way than coming on an archaic and as far as I can see now very lightly populated corner of the online world once in a blue moon.
My view is that the listing of this company has been an utter failure from the get go and management has been engaged ever since in an endless attempt to pump value which institutional investors simply do not buy. If I were a conspiracy theorist another view would be that the whole thing has been a knowing scam by insiders from the off. That they listed the company for a multi billion pound pay day and have been stuck ever since in having to play at managing a publicly listed company to deliver fair shareholder value. And failing hopelessly. The company came perilously close to complete wipe out in 2015 FFS. That was an utterly shockng failure for a publicly listed company that would have ruined many investors lives. The Xstrata acquisition - also touted as transformational, yet GLEN.L management then almost immediately wrote virtually all of Xtrata's brownfield assets down to zero. Sorry, if that becomes your view of those assets that quickly then plainly you should never have paid what you did in the first place. Etc.. Going a step further you might think that actually what this company is all about is running it as a yo-yo share for people in the know to trade for profit as it constantly lurches up and down by absurd amounts for a supposedly blue-chip asset. (Or by issuing yourself a fresh 9.9% in the company, to the exclusion of anyone else, when the share price collapses to under a pound.)
My take on Teck now is that it is just another case of pumping bullsh*t. Something that sounds great at first blush then ... . Then it transpires the acquisition won't even close until Q3 2024. Then the spin off may not happen until late 2026. Etc..
Finally be careful about thinking Thungela is evidence of a windfall waiting to come here. TGA.L listed for a derisory price and settled there for long enough that most retail investors would have concluded that AAL.L had thrown away those assets for next to nothing and dumped the shares. They then skyrocketed on a once in a lifetime price bubble in thermal coal provoked by the Ukraine conflict and have since fallen back around 65%.
My previous post should refer to the "last Wednesday" intra day high, not "last Thursday". As all will appreciate the share peaked last Wednesday and has slide Thursday onwards, save for a bounce last Friday that then immediately unravelled.
Replying to Daytradenovice.
1. Why is it some sort of problem for me to have a consistent perspective and come on this board very occasionally, when I see a fresh and serious problem consistent with that perspective - i.e. that NOTHING positive EVER causes the market to re-rate this share properly? It trades at a truly laughable earnings multiple - something like 3 x.
2. It is not a "very small retrace" since the Teck announcement, nor quite obviously is the share now in the mid 450s as you state. It is mid 440s and sliding again today. So it has dropped 5 of 6 days since last Thursday and is off now approaching 6% from the Thursday intra day high of circa 473.75.
3. What is the disaster with it trading at 447 you ask?. Err that is the whole point of my having posted again. The disaster is a. that the share is 23% down for the year (it was down over 30% at the nadir) and b. the WHOLE point of my post is that what was announced last Wednesday should have been taken by the market as utterly value-transformational. It should have invoked a really serious unwinding of the YTD drop, especially with copper recovering as it has in recent weeks.
Instead the net gain from the Tech announcement has now whittled to under 4% - the closing price last Tuesday pre the announcement was 430.45. Over the same span AAL.L - a company that has really serious problems - is up over 10%. If you cannot see that the way the share has traded since Thursday - on top of its collapse since January, a drop that would psychologically destroy most retail investors - does not signal a very serious problem for GLEN.L as a place to invest your money hoping for capital accretion, when that announcement should have been taken by the market as pretty much the ultimate value transformational re-positioning of the company ... well I can't assist you any further.
Daytradenovice do you think I am wrong in some way? I come on this board periodically both for a sounding and hopefully to impart some useful perspective to others. I have posted again now - I think it is probably a couple of years since I last did so - because I am dismayed by what has transpired since the Teck announcement last week. I.e. I am back on here after such a gap because I see a real issue worth flagging. Which is a. that there was only a trivial gain if any versus peers on the announcement last Wednesday and Thursday, then worse b. there has been a 5.5% drop this week from the Thursday pm high for no obvious reason whatsoever. 5.5% is serious money, not something that should just drop off a share without apparent reason over 3 days - especially following what should have been a value-transformative announcement but which added precious little in the first place.
So my perspective to people who may be new to the share - because the people on this board tend to turn over - is be very cautious if you think there is some easy windfall capital appreciation to be had. It listed over a decade ago now for 5.33 as best I recall. It has never since gone above that (except I think maybe fleetingly last year a couple of times ) until Jan this year. Whereupon it promptly collapsed 30% from 5.83 to around 4.10. During that span investors had to live through a near full capital wipe-out in 2015. On any view that is a company that has manifestly failed to deliver as an investment proposition. There will be plenty who have had a field day in it over those years trading in and out of it. (That is in my view one of the problems with the share - because there is no stamp duty payable on it it constantly gets the f*ck traded out of it.) Be in it for that game if you think you know what you are doing, by all means. Be in to collect the [currently circa 9%] yield if that is your game. Otherwise be very cautious.
Dr Patience, you just confirm my point. WTF - seriously WTF - would EVER now cause this share to re-rate to a proper valuation if all that you mention, plus the fact that it has just announced a complete de-coupling from coal - after being hounded down for years by activist shorters over its coal business - barely moves the needle versus its peers over the course of two days last week, then it leaches back down 5.5% over subsequent days. Despite all macro factors being broadly favourable over those days and its peers being steady. It went down on Monday FFS despite copper being up over 2% on the day. Previously you could at least rely on it serving as something of a proxy for positive news in the copper price. Sorry, it is a completely mis-priced piece of sh*t. My view is the whole enterprise is a scam on retail investors. Look at 2015. The share price collapsed to near death levels, so what happened next? Glasenburg issued himself a fresh 9.9% in the company at those absurd low prices - carefully avoiding having to offer shares to anyone else - touting himself as some sort of saviour. "Thief" would seem a more apt description to me. You got in at somewhere down at those levels, good luck to you. I am also well above water. But my point stands. It is a fundamentally mis-priced asset and I see no sign of that ever unwinding after it has collapsed again over 30% this year from its January high and shown itself now to be barely capable of crawling off that bottom.
Now down 5.5% since the intra-day peak last Thursday. AAL.L broadly steady over that time. Copper up substantially. But this piece of sh*t keeps leaching down. After an announcement last Wednesday that should have triggered the most transformational re-rating in its entire history as a listed company. Instead it barely moved the share vs its peers - they all soared on inflation data, AAL.L went up more than GLEN.L on the day. It is a completely mis-priced asset (yield = approx. 9%) and I cannot see what now will ever cause it to re-price correctly. It still trades below what it listed for FFS. It went to near £6 in January - finally approaching something like a fair price after over 10 years as a listed entity. But that was underpinned it now seems purely by the price bubble in thermal coal - it then promptly collapsed 30%. The Xstrata acquisition was supposed to transformative. Instead the company sank to near collapse in 2015. Then came (and still come) the ENDLESS bullsh*t share buy backs, that never move the needle. Now it announces a complete decoupling from coal and this is brushed off by the market as effectively worthless. Yep, it is a dog.
Wayzgoose, I hope you realise you paid 487, 450, 442, not 287 etc.! 287 is the good 'ol days (i.e. last summer) when, according to the market, that (i.e. probably about 2 x earnings) was a fair price for this piece of d*g****. The current prices are nosebleed stuff relative to its overall history - I mean how dare a share get back even to near its listing price again after 11 years, let alone break green! Obviously the fact that it poked its head above the listing price twice last week and the week before was enough to send it into complete meltdown.
Glencore now down over 18% in 4 trading days, Anglo American 25%. I have owned (and recently sold down in thankfully) these shares since before the commodity crash in 2015, I sat through that, but I've NEVER seen anything this utterly f*cking irrational. FTSE no longer a credible place to put money when blue chip stocks move in this manner. Look at the 6 month chart for both these shares - the magnitude of decline since last week relative to the chart just cannot happen in a credible stock market. Compare even to Rio who posted a worse production update than AAL. AAL and GLEN are obviously now infested with moron traders and smart arses making a quick turn on spooking said morons.
PFen it is a pointless question whether they cut bonuses. They are beyond the reach of any sensible form of accountability hiding away in Switzerland and even if they did they will have found some other way to line their pockets at shareholders' expense. You are talking about a Chief Executive who issued nearly 9.99% of new shares to himself and connected cronies in 2015 at around £1.25. Naturally he structured the offering just below the threshold where shares would have had to be offered to all shareholders equally.
I came on this board a few weeks back to offer reasoned and constructive advice about this share, as someone who has been invested in it for a long time and knows it properly - i.e. stay away from it - and I was vilified with baseless personal reflections. The reason it keeps tanking is it is a dogsh*t company run by people who are taking shareholders for a ride. It has no intrinsic value any more, because it makes constant huge (£1 billion plus) net losses as a result of asset write downs swamping any profits in its trading business, and it no longer returns anything to its shareholders. It is as far as I know the only major global miner to completely cease dividend payments this year. It is now facing having to give away a major copper asset in Zambia to the Zambian Government at a ransom price because it stupidly shuttered production immediately in March and ceded market share to the rest of the market, destroying jobs and lives in Zambia in the process. Copper is now through the roof - up for the year despite Covid - yet the Mopani mine is shuttered and now virtually worthless to Glencore shareholders. That is how this company is run. It already largely wrote of the value of the mine in the last results statement.
That said, today's fall is nothing more than in line with the sector. The fall across the sector today is horrendous, ridiculous and inexplicable, other than that copper is down substantially and the bubble US stock market has pulled back for the first day seemingly in weeks, but you are talking about a pull back in copper today from over $6700. If you are invested in FTSE mining shares (other than silver/gold) I would say now be very worried because although copper is up for the year, iron ore is also at multi year highs, and China data is extremely strong, for the past 6 weeks mining shares have not moved up properly when metals have moved up, but they are pulling back sharply every day copper pulls back somewhat. AAL.L keeps dropping over 2% intra day from its daily high, even on up days. It is down nearly 5% today intra day. That tells me that there must be a lot of continuing short interest in the sector, determined to pull share prices back down again. I would assume some of the sharks who make their living destroying share prices got caught out back in March piling too much money into shorting good companies even further, when they had already reached absurdly low prices, and they are determined to pull prices back down again to exit their positions. One thing you can be sure of though - this dogsh*t share will be leading to way down, and lagging on any moves up.
I said last Friday I was done posting but people on this Board are back at it again today wondering why this share is down. PLEASE - move on from this company. You need to understand that management of this company do not act in the best interests of its shareholders. The company is run purely for its insiders to profit from its trading division. It owns sub-standard mining assets that its management simply cannot run profitably. Again it is run by traders - who bought a mining company (Xstrata) supposedly to leverage for better trading profits but who have been shown to have no clue how to run mining assets. So they keep writing down the value of those assets. They have been doing so from the day they acquired Xstrata. The management shareholders, who you might think would care if the share price goes down, don't care - because they are all literally billionaires who cashed up on this company years ago when they listed it. Hence why they have cancelled the dividend - they are using it to slosh around on commodities during a volatile period for commodity prices, to up the bonuses for the trading division. Not to generate higher profits to return to shareholders nest year. Come next year there will be another excuse not to pay shareholders - more asset write downs, another regulatory investigation etc.. It is distressing to be stuck underwater in a share like this, so please I am on this Board to warn others - don't make the mistake of getting into this share. 1.71 might look tempting. It isn't. This share went to 60p in 2015, management sat back in silence while that happened, then Glasenburg issued another 9.99% of the company to himself at £1.25 and made out he had saved us all. So even at a dogsh*t share price of £1.71 he has still made another several billion on that trade. So do you think he gives a f*ck about the share being down 55% since 2018, completely against the trend for the mining sector?
PS - I am off now. I have had two days of good theraputic venting. The fact that a long term shareholder has felt the need to come on this board and do that for 2 days should tell you all you need to now. Yesterday was genuinely the last straw in a very long story of abuse of shareholders by this company's insiders. If you are a retail investor like me who invests both for capital growth and income STAY AWAY FROM THIS SHARE. If you but into this share you are betting against the very people who rune the company. They do not want it share price to go up. If you trade, keep p*ssing around with this share if you are daft enough, but honestly how you could punt on it to the upside now is beyond me, even after drops like it had yesterday.