Tuesday, April 5, 2011

Vale (VALE) Forced to Appoint Murilo Ferreira as CEO

The government Brazil has forced the removal of Vale (NYSE:VALE) CEO Roger Agnelli and inserted in his place Murilo Ferreira, according to newspaper O Estado de S. Paulo.

In an outrageous attempt to use Vale as its personal piggy bank for its pet projects and socialist agenda, the Brazilian government has been looking for ways to have Agnelli removed so they could put a puppet in his place to do whatever they want him to do with the company; especially projects they want done in the country.

Agnelli was attempting to run a solid business which would bring value to shareholders and operate like it was in a free market to some degree.

That facade is now over, and foreign shareholders will have to watch carefully to see how their money is being spent and if it's at the expense of the company, which it no doubt will be. Probably time to get out of this stock while you can.

The government of Brazil used to run the company, although it continues to have a majority share. There's no doubt this is now a state-run company, whatever labels may want to be applied, and the projects and direction the company will go is largely only good for what the government wants for Brazil, and no longer as an independent company.

This is being spun as core shareholders in Vale having voted to put Ferreira in place.

Vale closed at $33.88, gaining $0.44, or 1.32 percent.

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