Bugger this, take me private

Diversified mining company, Anglo American plc announces that it will reduce production in order to cut costs and boost profitability.

https://www.ft.com/content/9e794642-f7f3-497a-ac02-e02b63cb96aa

OK, that seems logical and prudent….

In fact, why dig up the stuff if you are losing money on it or your costs are rising and crimping your margins?

but due to this news, the stock price fell 19% last Friday and 6% more in the following 2 days of trade.

Obviously, this would not happen if it was a privately held company.

And so, I think we’ll see a growing trend of listed companies becoming owned by private equity, sovereign and pension funds.

Benefits of such a trend would include allowing executives to move away from ‘short-termism’ and thus freeing up time that they currently spend appeasing public shareholders.

But the best part is not being forced to produce and grow at any expense, pressured by shareholder expectations and you also have most (if not all) of your funding and borrowing covered.

December 13, 2023

by Rob Zdravevski

rob@karriasset.com.au