Shorts worked this stock over going into the close taking advantage of the low volume due to the weather conditions. Then in the last 2 minutes they had it down enough to do some covering. Unless LG can come up with something else to announce, look for more of the same tomorrow.
I just takes time to put together a deal on this mine with all the parties involved. The trouble is it is the best interest of all parties to work out a deal outside of bankruptcy so everyone is giving this the time needed to make it happen. Just need word that a deal is at hand!
I do agree with you on one point, they should have put deals together on these assets when they took over the Board. But they didn't and here we are. You might want to consider their savings on interest from paying down their debt by $400 million and cutting the dividend, their savings is close to the $150 million that they are losing on BL. In any case, the urgency just doesn't seem to be there whether it is BL, AP, remaining coal mines or Wabush.
on $400 million debt reduction will generate $110 million alone that can be used to buy back $126 million worth of bonds at a 15% discount. This is outside cash from operations and sale of assets.
Jeff, we really don't care about your gut, tell us why their cash flow will decrease with the shutting down of BL, the only exposure they have to seaborne iron ore is in AP where they are still profitable. And US contracts don't reset in 2015, seaborne iron ore does not affect it. There will not be any further drain on revenue from Canadian operations. Plus, paying down long term debt by $400 million reduces their annual interest expense by $20 million.
This is exactly why I didn't vote for these guys, everything they were saying was not right. But now they are in control, they are making the right moves to build strength in the company and is why I support this and other actions they are taking.
Yes they have, currently at a 30% discount from a 40% discount a month ago. Through retiring half of their current long term debt, my estimates is that they will average 25% discount. Once they get down below $1.5 billion in debt, they can reduce the debt pay off to paying the amount they are saving on interest which will pay their total debt off within the required timeframe of the bonds.
and cash from continuing operations, CLF can easily retire $150 million of debt each quarter. Add future sales of assets, this number can triple. No other iron ore miner can claim this!
LG will make everything clear at earnings, just hope he continues to hit the good points in the media after the conference call is over. But expect the shorts to hang on so that they can cover. They will continue to push on the dividend cut and you will get many on this board that will say they are going to sell with this news. It is all part of the short attack in its last days.
While totally ignoring the $400 million in debt reduction. $30 million in dividend cut vs $400 million in debt reduction, which should be the bigger story? It is clear the company doesn't need the savings from cutting dividends to pay for operating expenses!
The cash from dividend cuts can be used two ways, one is to pay for operational expenses and the other is to pay down debt. In CLF's case it is used to pay down debt and as an added bonus they can use that money to buy back bonds at a 30% discount making that .15 cent cut a .20 bonus to the company. And I am not going to miss the .15 a share Scottrade takes out of my account every quarter.
Oil slid on Friday and HK managed a gain. Market starting to understand HK's hedged position and the fact that falling oil price has NO impact on their bottom line. Matter of fact, the falling oil prices is improving their bottom line as their cost are decreasing with lower supply and labor cost.
Not really, if CLF gets anything over $1 billion out of BL and the BL Railway, they will have to pay taxes on the gain as it will be booked as income. The impairment charges took the book value down to $1.1 billion for all of eastern Canadian ore. There will be a deal, just maybe not tomorrow afternoon. But something will be leaked before earnings announcements.
No bias, just who pays them. When I was in product development, most of my advertising budget was spent on "experts" to place my product in the media. It is funny, place a guy in a white medical coat and he comes across as a doctor whereas he is really a Realtor, I know this because he was my Realtor in my construction business.
I was right on the 20th, it didn't hold and went up allowing me to reach a fair profit for my day trade. On the other hand I was wrong today and got stopped out with a $500 loss.
I agree with you on this, should have dumped their Australian operation along with Wabush at any price. Then he should have moved BL into bankruptcy and all of this would have been behind us now with $1.5 billion trimmed off the balance sheet. And CLF would be well on their way to earn $800 million in 2015. Really thought Casablanca clearly laid this out ahead of the proxy vote.