The announced buyback is a start, something the previous management refused to address. I don't know when it will start, but today would have been a great day to trap a bunch of shorts this morning.
CLF responds to negative news is a direct indication that the price is controlled by short interest. The new management realizes this and is stepping up to address it. Remove the short manipulation and we will be back where good news is good.
Look at the volume. CLF is trading above average volume while the general market is below the average. This tells me CLF is continued to be a target sell for the benefit of the short interest and it is this problem that management needs to address. On selling the assets, CLF''s only option is to spin off the international assets and with the Ring of Fire headed in the right direction, they should get a good price for it along with their other assets as the market will be receptive to a diversified mining package.
has officially been formed. From CBC on 8/28:
"The Ontario government announced today that it has established the Ring of Fire Infrastructure Development Corporation, with headquarters to be located in Thunder Bay."
With the Ontario and Federal Government represented, they are moving forward and should add value on CLF's holdings.
CLF just needs to package up all these assets and sell it off as an IPO, only chance they can get a fair price and send some of their debt with the new company.
Announce a buyback is step one, now they need to be in front of the media keeping the market informed of the positive direction the company is headed. Need to keep the speculation at bay.
Once they make those purchases, the shorts are in trouble. And they don't have to use borrowed money, they are sitting on a huge $600 million plus inventory that has been paid for and expensed out.
They will get sucked in and lose, watch for a 100,000 share move on the buy side to reverse this current down move.
Just have to have the right Jag, watched Fast and Loud where the Gas Monkey sold a 70's vintage XKE for $24,000 that they just purchased for $18,000. The point here is you want to sell when everyone is buying and buy when everyone is selling.
The US economy is leading the world recovery and manufacturing is returning to the US, shorting a US company such as X is not wise as well as shorting a US iron ore company like CLF. Energy is the key and the US is gaining the upper hand with lower energy cost. Add the high cost of transportation, increased productivity, and production cost is much lower in the US. I would cover any shorts in X and CLF now.
Again, they are sitting on over $600 million in inventory that has been expensed. Normal inventory levels at this time of the year is around $400 million, so they can sell off $200 to $300 million and get all the cash they need for the buyback, no need to rush in to sell assets.
Announce a buyback and the shares do not move. Then when shorts figure out there is no further downside as any shares sold short will be greeted by purchases that keep a floor under the price, the shorts will cover and move on. Those that are short now will attempt to drive the price down so they can cover before the company actually buys shares, so they have just a short time left to cover.
The best thing a company can do to stop a short attack is a stock buyback. If the past management would have done this earlier, they would still be the people in control. Anyway, it is good to see Casablanca playing the game as it should be played and look for a short squeeze in the near future.
Sell one third of their inventories to bring in $200 million in cash. Buy back shares, don't retire them. When the stock moves up and the shorts have moved on, sell those shares back on the market for a great profit. Use that profit to retire debt.
They are sitting on $600 million plus in inventories, it is easy, just sell one third of the inventories and they still will be at their average $400 million inventory levels. Really, you need to look carefully at their balance sheet.
Just got in, good news. With very limited number of shares available to short, Casablanca will be able to buy up any shares the shorts want to sell and put a floor under the price. The smart move by the shorts is not to try to kill the move, but to cover now. The smart move by CLF is to buy as many shares at this price now. Right now you have some day traders taking profits on the run up as many target 50 cent swings and run.