| Understanding the Catalysts for Freeport-McMoRan’s Divestiture | |
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Freeport-McMoRan to Offer Up Energy Assets: Will It Be Enough? (Continued from Prior Part) Freeport-McMoRan’s energy business
In the previous parts of this series, we analyzed the strategic rationale for Freeport-McMoRan’s (FCX) energy IPO (initial public offering). In this part, we’ll analyze whether the timing is right for the offering. Also, there are two likely catalysts sparking the company’s decision to go public. We’ll explore these, too.
More stable energy prices
Crude oil prices have recovered from the sub-$50 levels that they reached earlier this year. The previous chart shows the movement in the WTI (West Texas Intermediate) benchmark over the last few months. WTI prices have been hovering around $60 per barrel for quite some time now. There’s broad consensus that crude oil prices have settled here and that this is the new normal. More stable crude oil prices is a key catalyst for Freeport-McMoRan deciding to launch an IPO for its energy business.
Strong equity markets
Strong equity markets are critical to the success of any IPO. Broad US markets (SPY) (VTI) are trading near all-time highs. With that, there’s a feeling that the rally might lose steam. In all likelihood, the Federal Reserve will hike interest rates later this year.
These factors suggest that Freeport-McMoRan might have timed its exit strategy from the energy business quite well. Yet the same could not be said about the timing for an entrance into the business.
As far as Freeport investors are concerned, the damage has already been done. What remains to be seen is how much value Freeport can salvage from its energy assets.
Meanwhile, after the divestiture of the energy business, Freeport will go back to being a copper play like Southern Copper (SCCO) and Turquoise Hill Resources (TRQ). We’ll find out how the copper industry is doing in our next part.
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Freeport McMoRan Copper and Gold Inc.
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PRODUCER |
CODE : FCX |
ISIN : US35671D8570 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Freeport McMoran is a gold and copper producing company based in United states of america. Freeport McMoran produces gold, copper, cobalt, molybdenum and silver in Chile, in Congo Dem. Rep. of, in Indonesia and in Peru, develops copper in Peru, and holds various exploration projects in Chile. Its main assets in production are CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI and MORENCI - ROM LEACH in Chile, GRASBERG, SIERRITA and BAGDAD in Indonesia, TENKE FUNGURUME and TYRONE in Congo Dem. Rep. of and CERRO VERDE in Peru, its main asset in development is SAFFORD in Peru and its main exploration properties are BAGDAD - ROM LEACH and CHINO - ROM LEACH in Peru and CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH and CLIMAX in Chile. Freeport McMoran is listed in Germany and in United States of America. Its market capitalisation is US$ 71.5 billions as of today (€ 66.8 billions). Its stock quote reached its lowest recent point on March 06, 2020 at US$ 10.00, and its highest recent level on April 25, 2024 at US$ 49.40. Freeport McMoran has 1 448 000 000 shares outstanding. |