No, any bankruptcy judge will look at their cash, inventories and other current assets and throw it out of court. There is no long term debt due until 2018 and CLF easily generates enough cash to meet all interest payments. Everybody on this board throws out bankruptcy, yet no one lays out the reason why.
On the other hand, the Canadians should offer to help to keep their jobs. CLF has shut down Wabush and they should shut down BL. Canada should offer CLF $2 billion at very low interest loans to pay off their bonds and cut CLF's interest rates in half. And they should force the unions to take some concessions. Otherwise, CLF should just shut down all Canadian operations.
I wish you would have said this earlier, I would have written your name in on the proxy vote.
Based on their financial statements and balance sheet, yes they should. What you have here is total manipulation by a major short attack. Shorts have said CLF has a debt problem but they never outline CLF's actual debt and when I call them out, they avoid any direct answers. Shorts base CLF's cost to produce iron ore on their Canadian operations, never on their US or AP. Shorts base CLF's revenue on seaborne spot prices, never on their US contract amount.
The problem as I see it is one where management does not address these issues in the media. Once they wake up to this problem, this stock will suffer. Maybe with a good Q3 and the company taking the results on the road, we will see the rebound that is long due.
It is the US demand for pellets and it's low cost to produce and deliver them that makes CLF the main US supplier. It's main market it serves is what makes CLF profitable. It was their attempt to serve the other markets that brought it down. Returning to its core US business is what will bring this company up. I can't wait until Q3 earnings come out and shows the market just how strong the US market is for CLF, 8 million tons sold in the US at $101 with a cost of $71 gives them $240 million in profits.
Iron ore is starting to turn around as the Chinese cycle will pick up going into the end of the year. These "experts" know this and making one last stand for their clients to cover.
The unemployment rate is lower than 5.9%, one of the effects of the Great Recession is the number of people that are working for cash and not returning to the mainstream workforce.
Good employment numbers causing the dollar to gain strength which is bad for materials. Solar has been on the warpath about the US government spending money on senseless wars, QE and the country going bankrupt. Based on this, the dollar should be weak and commodity inflation should take off, but it hasn't.
I think they only have $30 million to charge off on closing wabush, far as I know there are no charge offs to BL and the charge to the Pinnacle mine should be minimal since Casablanca put them back to work, I am guessing $10 million against Pinnacle. Then I am going with $35 million on the change of management.
For Q4 no one knows, the big wild card is if they sell an asset for less than tax value where they will take a charge against earnings. I hope Gonclaves does not take anything less than the tax value.
I keep on trying to nail the number each month for employment on CNBC and have never won the t-shirt, so guessing the number here is about the same. My problem is the one time and non cash charges, but I am sticking with 50 cents with 7.5 million tons of ore sold in the US at $101 a ton, $50 million tax benefit and a minimal loss in coal leading the way. I am expecting $75 million in one time charges against earnings.