There are so many index funds that I think the impact of one fund is not as bad as it was in the past. I am encouraged by the statement from CAT about the strength of the N. American market and that Europe is turning around.
It is all about the spin in the media, shorts are active with paid analyst reports and CLF management just sits on their hands. The turn in seaborne iron ore prices will have a positive effect on the BL sale.
This move in iron ore will get people rushing to close on BL and Wabush off the bottom. It will give LG some room to sell their Asia Pacific mine and coal assets at a fair price. When the iron ore dust settles, CLF could be free of all debt!
Hopefully BHP and RIO are done, since they ship a lower grade than 62%, they have to be close to break even and need to get back to making fair margins again.
I don't ignore many people on the message board, except for Robert the sheep dip and solarmanmike. The best way to deal with these people is not to reply to them and their stupid remarks will disappear from the front page sooner. I expect thumb downs and know I am on point when I get them, it concerns me when I don't get them.
Capital World is a classic hedge fund while maintaining a long position in CLF, they had a partner with a huge short position which allowed them to sell off a large piece of their holdings so that their partner can cover. If they are leaving CLF, that tells me the short play is over for them and they are moving onto their next target. FMG with their losses could go bankrupt whereas CLF is maintaining profits and cash flow that takes bankruptcy off the table.
The whole problem in our world is that funds must disclose their purchases and sales of a company. Whereas they don't have to file a single note on their short positions. The public is left in the dark and can't see exactly what these players are up to while they manipulate the markets.
You know, CLF had threaten to turn off power to the facility to completely shut it down and allowing everything to freeze up, but they didn't. There is value there!
The outline of their mine development project includes a rail system, a dock facility and run power to the mine. The Wabush assets include the rail system and dock facility at Sept Lles. Then if the Wabush mine stays closed, they have told the government that the new mine will hire all of the displaced workers for which the government will run the power into the mine. All of this will greatly cut their mine development cost but the actual Wabush mine will remain closed which I imagine would not sit well with MFC. Without the rail and dock assets, the Wabush mine is totally worthless and I don't see MFC just sitting on the sidelines without making some type of move.
Vale, FCX, TCK… are down as well. Always happens before earnings, low expectations and no responses out of management due to quite period. Because of that, short activity in the media is high.
Truth is CLF needs to get rid of BL because the holding cost is too high and if they can get some cash out of deal, that cash can retire more debt than what they get out of the sale. A buyer for BL will more than likely be an Asian steel company that wants to lock low iron ore prices in for the life of the mine. So when the big 3 start raising prices, these steel mills will have a great source of low cost high quality ore. The mine will be sold, just hoping there is multiple bidders. When the smoke clears, CLF will be left with a profitable US iron ore business and their net debt will be under $1.5 billion. That debt will be eliminated through future tax benefits and interest savings.
Here is one to think about. CLF's chromite holdings were part of the bankruptcy and when they found a buyer for it, the court released the asset and allowed CLF to collect $20 million for it. If CLF did not hold the security, that $20 million would have been put into the court to pay claims. I am sure BL and Wabush are held in the same way.