Yes they bought CLF's interest, but it did not close until a month ago. Just like when you buy a house, it really isn't bought until it closes and the money is in hand. Anglo had to buy out CLF's interest before it could close on the complete sale of the mine as it will be paid to Anglo over 5 years and the buyer must not have wanted to deal with two parties. The requirement was for Anglo to buy out CLF's share before the end of 2013. The key here is that CLF finally received $125 million last month.
Yes, the market is having a great run, but consider where we were and where we have come from. Basically we are slightly above where the market was before the big crash. And while the market is up, the general economy has not been performing as well. Now the worldwide economies are showing strength and I believe we are now just at the beginning of a long term up cycle. Our first hurdle is to get over the Fed tapering issue. We need to have a taper and let the market see that there is no negative effect on the economy, just like there was no effect on the government shutdown.
My problem about a correction and everyone talks about it because the run up in the market, but no one gives any other reason for it. All the economic data is coming in positive and the only thing the negative analyst can come up with is that positive news is bad because of the "taper".
OK I have gave you enough rope, it is clear you don't have all the information to make an intelligent response and you don't understand the difference between income and charges. Here is the facts:
CLF purchased their share of Apama for $479 million.
They took an impairment charge in Q4 of 2012 of $365 million
They took an impairment charge in Q2 of 2013 of $68 million
Leaving their book value of the asset at $46 million
The just closed the sale and received $125 million.
Trust me, the IRS is going to want part of the impairment charges back and they will want CLF to record $79 million in income,
PS, I know how to spell it, just shows you how petty you are when you make an issue out of it.
Furthermore, Anglo's sale is not scheduled to close until after the first of the year. However they needed to close out CLF's interest before the sale could go through which they did a few weeks ago.
CLF is not on an accrual system of accounting and will record the sale when the money is deposited. What I saw was the amount Anglo had to pay to CLF which was required prior to Anglo selling the mine. I have gone through Q2 earnings and don't see a line item for this sale.
It is time to start thinking about earnings. Iron ore prices have been holding up and economic activity has been strong, we should see a good followthrough with CLF's earnings. Plus the sale of the Apama mine will contribute to their total earnings and yes it is a one time gain outside of their regular business operations, but it is still EARNINGS that the IRS requires them to report and pay taxes on. From what I have gathered, the sale will add about 50 cents onto their quarterly earnings.
$45, you are going to have to wait until Q4 earnings. Based on Q3 earnings, I believe they held back sales to carry into Q4.
That makes sense. Correct me if I am wrong, but when someone takes a short position, they borrow those shares and those shares are sold. Then at some point after, the person will cover that short by purchasing and replacing those shares. I can see where that sale volume can drive down the price in the short run.
Yes, the article did mention that as well while they didn't come out and say CS is stupid, the article pointed that way. No one is really taking them seriously.
I don't invest on technical analysis, however I respect the approach. I am going to keep it simple, the industry average price is 1.8 times book which would put CLF's price at $57.60. Using book value factors in all their current financial positions and does not look at future economic activity in iron ore. So if you feel a little bearish on iron ore, a $45 price is fair.
I was reading an article in Macrobusiness that explained where CS is coming from. They are basing their position on iron ore going to $85 a ton, CLF not bringing new production on line, high cost of production and high debt load that will not get paid down. Since developing this model, the price of iron ore has gone up, demand is up, CLF has reduced their cost to $65 a ton, paid down debt and increased their cash position. Faced with all this positive news in iron ore, they are still maintaining iron ore will fall to $85 and keep pushing out their time frame as iron ore price keep rising.
"Credit Suisse has an update on Chinese steel production today that underlines just what a banner year this has been for Chinese steel."
And they still maintain iron ore will fall to $85!
"If production can stay above 800 million tonnes, the year on year growth will be 14%. That is so far ahead of the most bullish forecasts in the market, which were around 740-750mt earlier this year, that it is just not funny!"
#1. The stock was shorted from $90 down to $16, so recovering to $28.95 does not mean a thing.
#2. Short squeezes is a direct relationship to the quantity shorted and the float, the bigger the percentage, the bigger the short squeeze
#3. Since a short borrows the shares, the percentage between their cost and the dividend is a big deal. Do the math.
#5. If you can't project the future, you should not be investing.
#6. Basic business, earn money, invest into the company, pay debt obligations.
#7. Musk orchestrated the perfect short squeeze on TSLA and Ichan did the same with HLF.
Finally, no one really cares what you or I think and if they are basing their investment decisions on posters on Yahoo, they are misguided. All I try to do is provide information, where the information came from and my personal take on it. So get off your high horse.
In my opinion, there will be a major short squeeze in CLF, there will be nothing orderly about it.
1. Huge percentage of short to float.
2. As the price rises and dividends are paid, shorts are going to have to come up with cash.
3. Every action has a bigger reaction, the shorts took CLF down fast and their covering along with recovering markets will take it up faster and further.
4. CLF's financials are good and market conditions in materials is improving. There was no basis for the short position in the first place. CLF is going to report $3.50 earnings for 2013.
My best guess is CLF will quickly rise to $40 where some consolidation will take place, then from there, I don't have a clue. All I know is all the shorted stocks I have bought into, they more than doubled after I sold them!
Doubt it will fade, we are seeing some day traders selling after $1 gains. Once they get cleared out, more short covering will occur as shorts know what can happen in the media after hours.
Yeah, still have my offer to sell at $44.90. Seriously, a handful of smart shorts covered this morning leaving a huge number of not so smart shorts.