Glencore holds value on trade debut

GLENCORE INTERNATIONAL, the commodities company that sold $10 billion of stock in the world’s biggest initial share sale this year, ended its first trading day in London at the same price offered to investors.

Shares in Switzerland-based Glencore closed at 530 pence, giving the company a market value of £36.5 billion.

They earlier rose as much as 3.8 per cent to 550 pence and never traded below the offer price. More than 550 million shares were traded during the day.

“Nothing would’ve done sentiment worse than if there was an immediate mark-down,” James Bevan, London-based chief investment officer at CCLA Investments, said.

“I’m absolutely confident the share price goes up in the immediate term, but I’m very uncomfortable about what happens thereafter,” said Mr Bevan.

Glencore, ending three decades of operating as a partnership, announced the sale three weeks before a commodities slump wiped $99 billion off raw materials’ market value in five days.

An echo of 1990s-style dotcom euphoria, meanwhile, reverberated around Wall Street yesterday as shares in LinkedIn, the business-focused social network, more than doubled on their first day of trading, valuing it at nearly $10 billion.

The strong reception pointed to pent-up demand for the Facebook generation of young internet companies and is expected to be followed by a spate of initial public offers from other companies linked to the online social networking revolution.

However it also drew warnings that a new internet bubble might be in the making, with investors rushing to pay prices far higher than a level that was considered extravagant only days before.

LinkedIn’s shares were trading at $122.69, up 173 per cent on the $45 IPO price. At that price, it is valued at some $9.8 billion, almost triple what it began the week at when bankers put a price tag of $32-$35 on the shares.

That leaves it at 40 times last year’s sales, on a par with where Facebook is valued on private markets. (Bloomberg)