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Barring An Increase In Iron Ore Pricing, Cliffs Is Insolvent In The Medium Term

This is an update of my previous Cliffs (CLF) article. I am going to refrain from rehashing the earnings release or transcript, but want to show readers and investors the real medium/long-term implication of continuing degradation of U.S. iron ore pricing even with their new, lower cost structure.

I do love reading the Cliffs transcripts with their new CEO, Lourenco Goncalves. I have never seen a CEO treat analysts so poorly because they have poor ratings on the stock. I am not saying he got the company into this mess (he is at least actually reducing expenses), but I do not see how he is going to get them out of it. Treating analysts poorly as they try to understand the long-term implications of the business is unprofessional.

As a quick recap, Cliffs has sold off a substantial portion of their U.S. coal assets and is working to… Read More …