The BIG question that needs to be raised at SH meeting is that How to bring Debt to Mkt Cap ratio in line ie around 2X. Only way I can think of is if CLF buybacks $100mil-$200mil worth Common shares, It will immediately cause Shorts to scramble for the COVER , cut the number of Outstanding shares drastically and lift CLF's stock price to as high as $8 and bring Debt / Mkt Cap to 2X( $2.5B/$1.25B). This is the BEST possible Sceneario except to sell the assets and lower the debt..
Aussie PM Abbott to support the Parliament's inquiry into IO probe of big miners driving down the IO price to shut down Smaller miners. Mr. Forest , Chief of Fortescue Metal almost accusing of BHP and Rio of manipulating IO price.. pushing it down by increasing the suppy to get rid off smaller competitors and then raise the price. of the commodity. BHP down over 6% and CLF down over 5%in sympathy.
Is that your answer to everyone? go away . you are becoming an idiot more and more like
surf.. for some reason. WS , Analysts and big time Shorts know something that we don't know about the debt or they would not be shorting on great 3 QTRs performance by LG. Its all related to DEBT and LG has been slow to move on it and NOT making a better case in the Media.
Based on one mine they sold for $175 mil .. 2 more to go. This guy LG when he was a CEO of Metals Co, took the stock from $3 to $23 when he left. He will do the same for CLF. He wants badly out of being associated with SB IO price and expand more and morei of USIO business. here.
LG is working hard to undo the stupidity of previous MNGT which piled up a huge debt by buying Consolidated Thompson ECan Mines for $4.9B. It takes time and he has already reduced debt from $3.3B to $2.5 B now. The sale of 2 remaining MET mines is imminent and that along with BL BK resolution may reduce well under $2 B. Analysts have [raised LG during the C but then they bash him all because of debt but it takes time.
He should had sold APIO last year when SB IO was around $80 but its still profitable and SB Io price has rebounded to $62 and will move higher. APIO mines as a life of only 3 1/2 yrs remaining So its OK. On a bright side, He had produced earnings for last 3 QTRs since taking over as CEO and WS somehow doesn,t seem to get it. and only thing they look at is the debt. He has cut SG&A and CapEx drastically by over 75% and more will be cut as those coal mines are sold and they are not a part of P&L now. Analyst praise him in the CC and then bash him . which I don't get it.
I would like to see him spend some $100 mil of the $200 mil allocated by the Board to buyback some 20mil common shares . That will drive out a lot of Shorts and Significantly improve the Mkt Cap of the company as stock may shot up 2 points. Regardless I see LG producing earnings of
$0.30-$0.40 /sh for Q-2 .
NO. The word is that the number may be around $ 300-$400 mil for both MET Coal mines. 15 to 20 year life span for a mine is considered to be adequate and we may hopefully hear something on this coal mines' sale in the meeting.
WS and Analysts are very worried that CLF may NOT be able to pay off debt when due in 2018 and may have to refinance it at much higher interest rate and the current interest is about $200 mil annually. They MUST MUST Sell Coal assets and Lower the debt and Hopefully BL resolution will bring some $300mil-$500 mil cash to CLF after all is said and done. They need to lower the debt to under $2.0B soon and then every QTR pay off $100 mil at least. That is $400 mil/year and pay off entire remaining debt in 5 years . If this plan works , then CLF stock price will zoom in $25-$40 range based on if earnings amount to $2-$4 per share..IMO
Here are the meeting Agenda:
Approval of the Election of Board Directors Nominees
Approval of Cliffs 2015 Equity & Incentive Compensation Plan
Approval of Cliffs 2015 Employee Stock Purchase plan
Approval of Executive Officer Compensation
Ratification of the Appointment of Deloitte&Touche LLP as an Independent Accounting Firm for CLF
Plus answering any Questions that Shareholders may have.
matt...come to the SH meeting and ask him that question. Here is your opportunity, AND SEE WHAT HE SAYS.
surf..In the end its the stock price and stock price determines the Mkt Cap. Why are you investing in stock market? The reason is for the stock to go up. If LG buys some 20 mil shares with $200 mil that the Board had allocated , this stock will be jumping up as Shorts will scramble to cover. Other companies have done this to drive out the shorts and have succeeded.
surf.. that is so preposterous to think that LG doesn't want the stock to go up.Stocks Mkt Cap is the heart of the Company. I don't believe it. He can use only $100 mil to buy back shares and CLF stock will jump up $1-$2 or more.
Reducing debt from $2.5 B to $2.0 B will also reduce interest expenses by $40 mil from $200 mil to $ $160 mil which is like $0.26./sh ( 40/153) in extra earnings. Non-core asset sale and BL complex BK resolution can do it.
Until CLF reduces the Debt well under $2 B, No matter how good earnings are. Debt is all on the mind of Analysts, Shorts and Investment Bankers to short this stock and NOT recommend the buy. Debt reduction should be the HIGHEST PRIORITY for LG..IMO
I have been saying this for a long long time that CLF should buyback some 20 mil shares from $200 mil allocated by the Board.This will put a huge pressure on Shorts to cover their shares and CLF stock price will move up some 10%-15% up. THIS WILL PAY OFF MORE THAN SOME $100 MIL INVESTED IN THE BUYBACKS.
$1 B clear?from whom the buyer of Can assets or Quebec Gov. or both? I deubt CLF can get $1 B. We will see next week what happens. LG may also say something about this in SH meeting on Tuesday
surf.. does the cash cost of $60/ton for USIO include the cost of CapEx and SG&A ? They both add upto some $200 mil. If NOT, add the Interest cost of $200 mil, Dep/Am $150 mil, Pref. dividend of $52mil and some Fed Taxes and Not much Cash Flow will be left to pay down the
actual DEBT. That is why Analysts and WS are worried about. too much debt. Clarify if you can .
Hope you are right. We will see. What LG has to say in the SH meeting next week may AFFECT HOW THIS STOCK WILL TRADE.. Have a good day.