Glencore fails to run smoothly

Glencore's shares closed on Wednesday at 473p, 11% below the flotation price of 530p. The price was even outside the original 480p-580p range that was published at the start of the float process. So much for the "stabilisation" period, managed by Morgan Stanley via a so-called "greenshoe" over-allotment of shares that was meant to ensure a smooth introduction to the public markets. Maybe the volatility would have been even more severe without the bank's efforts. But when shares fall stabilisation managers always argue that they are not there to provide an artificial prop. Fair enough, but what is their role? The exercise seems pointless.