Glencore shares are getting obliterated and analysts say the mining giant 'could see almost all equity value eliminated'


Mining giant Glencore's stocks are being dumped heavily again on Monday, falling by 10.5% as of 9:47 a.m. UK time (4:47 a.m. ET).


Goldman Sachs speculated last week that the company would not be able to hold onto its BBB investment-grade credit rating, and risked being downgraded to junk.

Here's how it looks - the share price dipped below £0.90 for the first time ever, after dipping below £1.00 for the first time ever on Friday.


Other miners are suffering today, but Antofagasta, Anglo American, BHP Billiton and Rio Tinto are all down by between 1% and 3%, not the double-digit collapse Glencore is pressing against.


A note from analysts at Investec on Monday showed how high the stakes are for anyone who owns shares in the company (emphasis ours):

Using a PE-based approach to evaluate equity value going forward, in proportion to debt, we note that the heavily indebted companies (GLEN LN, AAL LN) could see almost all equity value eliminated under spot conditions, leaving nothing for shareholders.

Since the end of April, it's been one long grind, with Glencore share prices sliding ever-lower, tracking tumbling commodities. In fact, the shares have lost more than two-thirds of their value over the period:

glencore, Business Insider