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Freeport-McMoRan Inc. Message Board

imaginejml 447 posts  |  Last Activity: 1 hour 37 minutes ago Member since: Feb 21, 2013
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  • Thank you for your e-mail and your ownership of Cliffs.

    I understand your frustration with the recent share performance – much of this has likely been driven by macro factors such as lower-than-expected steel production out of China.

    As you did indicate, many of the changes we hope to make cannot happen overnight. Our CEO, Lourenco Goncavles, has been successful in turning around companies before, so I am confident he is following the correct gameplan. Currently he is familiarizing himself with our assets and employees, as it is difficult to achieve success without these core understandings. He has made our strategy clear: focus on our domestic operations in iron ore -- we will continue to enhance them and make the business stronger, resilient and more profitable. We will also be very deliberate and disciplined - but open-minded - about how we manage our other global assets. Given the cyclical nature of our industry, we will be prudently positioned to perform effectively even in the most difficult parts of the cycle.

    As you can imagine, along with the many opportunities our new leadership inherited, they also inherited many challenges, and I am willing to be patient as these are sorted through.

  • Reply to

    Let Me get This Straight...

    by vipinkot47 10 hours ago imaginejml 3 hours ago Flag


    I think there is also a lot of worry on q3 earnings with all of the charges that will be in here for the proxy battle: legal expenses and advisory fees to JPM/others from the old management team incurred during the qtr, payouts on the comp plans, etc., plus their will be the normal hits to earnings on the minimum transportation agreements, etc. Along with that we have lower IO pricing and possibly lower demand for IO.

    I also posted a story last hour on the backwardation of IO.

    CLF has a lot of problems to deal with right now. They have not given shorts reasons to cover or WS to buy. I wish they would say something today and have the full announcement within the 90days.

  • Iron ore futures are in backwardation right now

    The New York Mercantile Exchange iron ore forward curve is in backwardation right now. “Backwardation” means the future contracts are trading below the spot price. This means the market expects a further decline in iron ore prices based on current indicators and fundamentals.

    Supply surplus is when low-cost supply additions outpace demand for the world’s largest consumer of iron ore—China, which consumes close to two-thirds of seaborne iron ore. Supply surplus is the main contributor to this backwardation.

    In backwardation, the futures curve is downward-sloping. The opposite market condition to backwardation is called “contango.”

    Impact on companies

    Backwardation in the futures curve shows negative market sentiment regarding future prices. A decline in futures prices is negative for companies like Rio Tinto (RIO), BHP Billiton (BHP), Vale SA (VALE), and Cliffs Natural Resources (CLF) and also ETFs that invest in iron ore companies like the SPDR S&P Metals & Mining ETF (XME).

  • Reply to

    It's difficult to say anything good about CLF

    by dow50000 Aug 19, 2014 12:08 PM imaginejml Aug 19, 2014 6:22 PM Flag

    Stock is still holding its trend line upward from the run that began at $14. It has not broken the trend line yet. We need some news for sure.

  • and now we need at least two reports pro-proxy to know if the shorts are sticking to their postions, hitting it harder or starting to cover. The volume of late does not imply much covering or buying. So far CAS has not given anyone reasons to cover or WS to buy.

    I can waith the 90 days they asked for. They begged for our votes and they won our votes. They promised something different and I want to see something different.

    The first step is taking out the garbage and that is being done now. The following steps will come with an announcement soon, I hope.

  • Reply to

    So Halverson gets $11 million

    by w999surf Aug 17, 2014 9:26 AM imaginejml Aug 18, 2014 7:15 AM Flag

    We've just been through months of info coming out during the Proxy battle from both parties with general statements of purpose. The market needs something earth-shattering for CLF and anything less will be ignored. This company is still viewed as toxic to WS.

    CAS could and could come out now with a pre-announcement of some type but it would have to be something meaningful. The company dog won't cut it.

  • Reply to

    So Halverson gets $11 million

    by w999surf Aug 17, 2014 9:26 AM imaginejml Aug 17, 2014 11:31 AM Flag

    I am okay with a 90 day plan from. There are things they will certainly discover now that they could not have know of prior to the day they took control ofthe company.

    CAS clearly had an outline of the issues, but he could not possibly have known all of the facts/details before they took control. This 90 day due-dilegence process is improtant, as this will help them confirm their startegies or modify them somewhat. Regardless, the delay of 90 days, in my views, helps, not hinders CLF going forward.

    I only wish they would provide a broad outline for CLF now before he gives us the full details in 90 days. So long as WS sees CLF operating under the same plan as the old CLF, shorts have no reasons to cover and WS has no reasons to buy.

  • 1. Proxy related costs
    2. Legal costs
    3. Advisory costs (JPM and others)
    4. Usual hits CLF had over the prior qtrs from normal operations/idiling/etc
    5. Golden Parachutes going on now
    6,. Whatever else...

    I guess nothing better can happen for us until the garbage is taken out, so this qtr will have a lot of #$%$ that will be a hit to earnings.

  • In his letter, Sullivan said he said he had initially been looking forward to continuing at Cliffs, but his view changed after the new board's first meeting.

    "I have served on many boards in my career, both public and private," he wrote. "I can assure you that I have never experienced anything like what transpired in our initial board meeting."

    Addressing new Chairman and CEO Lourenco Goncalves, Sullivan said: "It was clear neither you nor the new directors wanted to hear anything that might be contrary to your pre-scripted plan."

    Sullivan said he had concluded he could not adequately represent all Cliffs shareholders on the board.

    Separately, Cliffs said it would have to pay former CEO Gary Halverson $11 million under change-of-control provisions adopted by the board last year. It said it would also need to make $16.9 million in similar payments to other officers and employees.

    Goncalves, Casablanca's pick for CEO, has said he plans to refocus Cliffs "on a new strategic path" that builds on its strengths. In an interview with Reuters in February, he said he would focus on supplying iron ore to steelmakers in the United States, not selling into the competitive global iron ore market.


  • Reply to

    new short interest shows shorts still hanging on

    by lishe235 Aug 14, 2014 9:43 AM imaginejml Aug 14, 2014 6:51 PM Flag

    This report is not a good gauge. The settlement date was 7/31, the due date was 8/4 and the dissemenation date was on 8/11. The next report will be a better tell to tell us if the shorts pulled in some following the CAS win.

  • imaginejml Aug 14, 2014 5:53 PM Flag

    I am with you on this 90 day plan. I just wish they would announce tomorrow the general direction that they are seeking with a time-line on the full announcement that's pending. I want them to give some reasons now for the shorts to begin covering and for WS to start buying. As long as WS thinks the plan they are going to operate under is the same as the old regime, things will not change for the stock and could fall back to prior lows.

  • Reply to

    What Is Wrong Now....

    by vipinkot47 Aug 14, 2014 10:06 AM imaginejml Aug 14, 2014 10:59 AM Flag

    As long as CAS operates under the CLF plan, there is no reason to buy the stock and every reason to keep shorting it. To think CLF can keep all the assets and expect a different result is nuts. Shorts will keep pounding it for the same reasons they did under the old regime.

    CAS has to sell off the int assets then you will see a rebound. BHP and RIO are at 12 months high. The problem isn't IO, the problem is the old CLF plan of holding onto the junk that is holding the company down

  • imaginejml Aug 13, 2014 3:20 PM Flag

    I am not speculating here. I just want to see something different and said the reasons why.

    I agree they need the 90 days to formulate a plan and to announce their strategy going forward. I just do not want the CAS plan to be a mirror of the CLF plan. Otherwise, we will be here another year complaining about why CLF languishes.

  • do what CLF was doing, which is holding the international assets.

    I maintain that CLF was heavily shorted on their prior strategy, not on poor PR by the company. WS was well aware of what the CLF plan was and they shorted CFL in force. If CAS keeps the same plan in place as CL's plan, the shorts do not go away.

    The only other way CLF stock price rises is if we see a favorable supply/demand imbalance for IO, creating a 30% bump in IO spot price. Does anyone here think that happens anytime soon?

  • Reply to

    DDD direction

    by ogewen Aug 8, 2014 11:23 AM imaginejml Aug 13, 2014 1:51 PM Flag

    Outstanding conversations here on this particular thread. I agree with everything written in all of these posts.

    I also would like to see these acquisitions being digested by the company and adding to earnings, which would cause the share price to rise. So far DDD has not produced what they have been promising every qtr in their CC, the promise for earnings growth. We need that.

    There will be time to make more acquisitions later.

    The company should be doing a much better job outlining the acquisition strategy in a more favorable light, because so the strategy is not helping DDD share price. We need WS to buy the story but they are not doing so.

  • Reply to

    CLF's Loss Sales Margins...

    by vipinkot47 Aug 13, 2014 11:04 AM imaginejml Aug 13, 2014 12:08 PM Flag

    CLF is being hurt in large part due to its obligations, which mostly comes from its holdings of those costly properties. The idea of holding them until the market price allows for a better price is crazy, as evidenced by WS refusal to buy the stock.

    Look at the charts of the stocks I mentioned, and ask yourself why CLF (the stock) is in idle mode.

    The CAS bump is turning into a fade and something needs to be done very soon for momentum to occur and shorts to cover.

    Todays drop in CLF and the sector is mostly off the China news. Tomorrows drop in CLF is going to be from news on business as usual until they sell those properties.

  • Reply to

    CLF's Loss Sales Margins...

    by vipinkot47 Aug 13, 2014 11:04 AM imaginejml Aug 13, 2014 11:25 AM Flag


    You are all over the place on this debate. One day sell them. Next day hold them.

    So tell me, why do you think WS is holding off on buying CLF while RIO, BHP, the steel companies, AA, the materials spider sector, FXI, etc. all trade at 12 month highs while CLF is still below its share price of 12 months ago.? I suspect it is because they still hold this stuff. It is a drain on the company.

  • imaginejml Aug 13, 2014 10:51 AM Flag

    The only stupid thing to do is hold a drain. Why do you think CLF can not recover. How much longer do you want to wait on your thesis to hold until you get your price back? That's aka ignorance or arrogance.

    Admit the mistake, which they did. Now fix the mistake. Your idea may take 10 years. Do you really want to wait for that and keep spending money and people power on idled properties.

  • imaginejml Aug 13, 2014 10:18 AM Flag

    More importantly for CLF, would this story be different if CLF sold all its non-core US assets, along with coal?
    Who is to say for how long we'll be lingering with low IO pricing? I suspect a very long time. Why not get rid of it now and put all the energy and resources and people power on the US trades?

    I think we would have a much higher share price if those sales happened, even at todays lower market valuations.

  • Material stocks around 12 month lows: CLF, VALE, WLT, BTU (all of these are below where they started from 12 months ago). I wonder if part of the problem is because of the coal businesses they have.

    Material stocks at 12 month highs: RIO, BHP, X, AA, AKS, FXI, SCCO, FCX, XLB (materials sector spider fund)

    There is a broad rebound in materials, just not for CLF yet.

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