Streetwise Professor

February 8, 2010

Going Down, Down, Down

Filed under: Commodities,Financial crisis,Politics,Russia — The Professor @ 4:37 pm

In a burning ring of fire?  One can hope.  I refer to the price of Rusal stock, which has tanked even further since its inauspicious reverse pop immediately after the IPO:

United Co. Rusal Ltd., the world’s largest aluminum producer, fell for a third day in Hong Kong trading, extending its drop since last month’s initial public offering to 20 percent.

The shares slumped 4.5 percent to close at HK$8.66 ($1.11) on the Hong Kong Stock Exchange. They cost HK$10.80 each in the IPO. Today marked the eighth slide in nine sessions for Rusal, controlled by billionaire Oleg Deripaska, since trading began.

“Hedge funds that participated have been disappointed with the dynamics of the IPO and are closing the trade and taking the loss,” said Joseph Dayan, head of international sales and trading at Otkritie Securities Ltd. in London. “The fact that liquidity is drying up is another negative.”

Now, part of this decline can be laid to the decline in world markets and the related news regarding the increasingly bleak prospects for the world economy in the past couple of weeks.  But it also arguably reflects that the Rusal IPO had more than a little pump and dump aspect to it.

Speaking of Rusal, Oleg Kozlovsky and I discussed Deripaska during our conversation.  Oleg said that it was widely perceived that Deripaska is willing to abase himself any way Putin desires in order to maintain his position, and that most of the public interactions between the two (e.g., Pikalyovo) are only so much theater.

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3 Comments »

  1. Does Deripaska have any other choices in the present global crisis?

    Comment by Leos Tomicek — February 9, 2010 @ 1:48 am

  2. I’m very intrigued by the relationship between Deprisaka and Putin (have you been keeping up with Stratfor’s siloviki/civiliki pieces?) and where that relationship is headed. I wonder if Putin is beginning to see that Deprisaka really is poison for expanding the Russian economic machine (see Opel as well). Might our friend be caught up in some unfortunate probe soon?

    Comment by Jack — February 9, 2010 @ 1:39 pm

  3. Speaking of Oleg, it’s now a crime for a journalist to report on his “unauthorized” protest activity:

    http://larussophobe.wordpress.com/2010/02/09/another-original-lr-translation-in-putins-russia-journalism-is-now-a-crime/

    Comment by La Russophobe — February 9, 2010 @ 11:06 pm

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