Cleveland Cliffs Inc (CLF)

[DewDiligence]

As expected. At least until after the election.

[MadCityCyclone]

Biden to Block Nippon Steel’s Proposed Takeover of US Steel

[MadCityCyclone]

insert-text-here

[Saving Grace]

Picture of Cleveland-Cliffs CEO Lourenco Goncalves from Brazil

[Saving Grace]

Cleveland-Cliffs CEO Lourenco Goncalves from Brazil groped employee, from past company Metals USA, and began sucking on her ear.

He's an animal.

Why wasn't that info out when Draper pulled him into Cliffs to be elected by shareholders as CEO.

Now we know that he really doesn't care about the company he represents as Metals USA had to shell $300,000 to the victim.

The $3000 bonuses he paid employees to be injured during the plandemic and shareholders company money he gave the enemy during war time could seriously cost the company a fortune. Lourenco made his son the CFO so he could sign the checks for both mistakes. Who knows what else this animal from the Congo has done behind closed doors.

Cliffs is on shaky ground as it is, what next?

https://www.duluthnewstribune.com/business/cleveland-cliffs-ceo-settled-2005-sexual-harassment-suit-at-former-company-documents-show

[abracky]

https://finance.yahoo.com/news/cleveland-cliffs-announces-promotion-michael-161600908.html

[abracky]

https://www.msn.com/en-us/money/markets/stocks-on-sale-albemarle-cliffs-and-bhp/ar-AA1pb4gj

[abracky]

The Steel Industry's Best-Kept Secret: Cleveland-Cliffs

https://seekingalpha.com/article/4715420-the-steel-industrys-best-kept-secret-cleveland-cliffs

[biotech_researcher]

Wow, that would indicate a deep recession

[Nebuchadnezzar]

the drop has much more to do with drop in steel prices than anything else

https://tradingeconomics.com/commodity/hrc-steel

https://tradingeconomics.com/commodity/steel

[abracky]

Cleveland-Cliffs Inc. Announces Proposed Offering of an Additional $500 Million Senior Guaranteed Notes due 2032

Source: Business Wire
Cleveland-Cliffs Inc. (NYSE: CLF) (“Cliffs”) announced today that it intends to offer to sell, subject to market and other conditions, an additional $500 million aggregate principal amount of Senior Guaranteed Notes due 2032 (the “Additional Notes”) in an offering (the “Additional Notes Offering”) that is exempt from the registration requirements of the Securities Act of 1933 (the “Securities Act”). The Additional Notes will be an issuance of Cliffs’ existing 7.000% Senior Guaranteed Notes due 2032 and will be issued as additional notes under the indenture dated as of March 18, 2024 (as supplemented, the “Indenture”) pursuant to which Cliffs previously issued $825 million aggregate principal amount of 7.000% Senior Guaranteed Notes due 2032 (the “Initial Notes”). The Additional Notes will be of the same class and series as, and otherwise identical to, the Initial Notes other than with respect to the date of issuance and issue price. The Additional Notes will be guaranteed on a senior unsecured basis by Cliffs’ material direct and indirect wholly-owned domestic subsidiaries, other than certain excluded subsidiaries.
Cliffs intends to use the net proceeds from the Additional Notes Offering to finance a portion of the cash consideration payable in connection with the previously announced acquisition of Stelco Holdings Inc. (the “Stelco Acquisition”), which Cliffs expects to complete in the fourth quarter of 2024 following the satisfaction or waiver of applicable conditions. Prior to the completion of the Stelco Acquisition, Cliffs intends to use the net proceeds from the Additional Notes Offering to pay off the entire outstanding balance under its asset-based lending facility.
This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities. The Additional Notes and related guarantees are being offered only to qualified institutional buyers in reliance on the exemption from registration set forth in Rule 144A under the Securities Act, and outside the United States to non-U.S. persons in reliance on the exemption from registration set forth in Regulation S under the Securities Act. The Additional Notes and the related guarantees have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act and applicable state securities or blue sky laws and foreign securities laws.
About Cleveland-Cliffs Inc.
Cleveland-Cliffs is a leading North America-based steel producer with focus on value-added sheet products, particularly for the automotive industry. The Company is vertically integrated from the mining of iron ore, production of pellets and direct reduced iron, and processing of ferrous scrap through primary steelmaking and downstream finishing, stamping, tooling, and tubing. Headquartered in Cleveland, Ohio, Cleveland-Cliffs employs approximately 28,000 people across its operations in the United States and Canada.
Forward Looking Statements
This release contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. All statements other than historical facts, including, without limitation, statements regarding our current expectations, estimates and projections about our industry or our businesses, are forward-looking statements. We caution investors that any forward-looking statements are subject to risks and uncertainties that may cause actual results and future trends to differ materially from those matters expressed in or implied by such forward-looking statements. Investors are cautioned not to place undue reliance on forward-looking statements. Among the risks and uncertainties that could cause actual results to differ from those described in forward-looking statements are the following: continued volatility of steel, iron ore and scrap metal market prices, which directly and indirectly impact the prices of the products that we sell to our customers; uncertainties associated with the highly competitive and cyclical steel industry and our reliance on the demand for steel from the automotive industry; potential weaknesses and uncertainties in global economic conditions, excess global steelmaking capacity, oversupply of iron ore, prevalence of steel imports and reduced market demand; severe financial hardship, bankruptcy, temporary or permanent shutdowns or operational challenges of one or more of our major customers, key suppliers or contractors, which, among other adverse effects, could disrupt our operations or lead to reduced demand for our products, increased difficulty collecting receivables, and customers and/or suppliers asserting force majeure or other reasons for not performing their contractual obligations to us; risks related to U.S. government actions with respect to Section 232 of the Trade Expansion Act of 1962 (as amended by the Trade Act of 1974), the United States-Mexico-Canada Agreement and/or other trade agreements, tariffs, treaties or policies, as well as the uncertainty of obtaining and maintaining effective antidumping and countervailing duty orders to counteract the harmful effects of unfairly traded imports; impacts of existing and increasing governmental regulation, including potential environmental regulations relating to climate change and carbon emissions, and related costs and liabilities, including failure to receive or maintain required operating and environmental permits, approvals, modifications or other authorizations of, or from, any governmental or regulatory authority and costs related to implementing improvements to ensure compliance with regulatory changes, including potential financial assurance requirements, and reclamation and remediation obligations; potential impacts to the environment or exposure to hazardous substances resulting from our operations; our ability to maintain adequate liquidity, our level of indebtedness and the availability of capital could limit our financial flexibility and cash flow necessary to fund working capital, planned capital expenditures, acquisitions, and other general corporate purposes or ongoing needs of our business, or to repurchase our common shares; our ability to reduce our indebtedness or return capital to shareholders within the currently expected timeframes or at all; adverse changes in credit ratings, interest rates, foreign currency rates and tax laws; the outcome of, and costs incurred in connection with, lawsuits, claims, arbitrations or governmental proceedings relating to commercial and business disputes, antitrust claims, environmental matters, government investigations, occupational or personal injury claims, property-related matters, labor and employment matters, or suits involving legacy operations and other matters; supply chain disruptions or changes in the cost, quality or availability of energy sources, including electricity, natural gas and diesel fuel, critical raw materials and supplies, including iron ore, industrial gases, graphite electrodes, scrap metal, chrome, zinc, other alloys, coke and metallurgical coal, and critical manufacturing equipment and spare parts; problems or disruptions associated with transporting products to our customers, moving manufacturing inputs or products internally among our facilities, or suppliers transporting raw materials to us; the risk that the cost or time to implement a strategic or sustaining capital project may prove to be greater than originally anticipated; our ability to consummate any public or private acquisition transactions and to realize any or all of the anticipated benefits or estimated future synergies, as well as to successfully integrate any acquired businesses into our existing businesses; uncertainties associated with natural or human-caused disasters, adverse weather conditions, unanticipated geological conditions, critical equipment failures, infectious disease outbreaks, tailings dam failures and other unexpected events; cybersecurity incidents relating to, disruptions in, or failures of, information technology systems that are managed by us or third parties that host or have access to our data or systems, including the loss, theft or corruption of sensitive or essential business or personal information and the inability to access or control systems; liabilities and costs arising in connection with any business decisions to temporarily or indefinitely idle or permanently close an operating facility or mine, which could adversely impact the carrying value of associated assets and give rise to impairment charges or closure and reclamation obligations, as well as uncertainties associated with restarting any previously idled operating facility or mine; our level of self-insurance and our ability to obtain sufficient third-party insurance to adequately cover potential adverse events and business risks; uncertainties associated with our ability to meet customers' and suppliers' decarbonization goals and reduce our greenhouse gas emissions in alignment with our own announced targets; challenges to maintaining our social license to operate with our stakeholders, including the impacts of our operations on local communities, reputational impacts of operating in a carbon-intensive industry that produces greenhouse gas emissions, and our ability to foster a consistent operational and safety track record; our actual economic mineral reserves or reductions in current mineral reserve estimates, and any title defect or loss of any lease, license, easement or other possessory interest for any mining property; our ability to maintain satisfactory labor relations with unions and employees; unanticipated or higher costs associated with pension and other post-employment benefit obligations resulting from changes in the value of plan assets or contribution increases required for unfunded obligations; uncertain availability or cost of skilled workers to fill critical operational positions and potential labor shortages caused by experienced employee attrition or otherwise, as well as our ability to attract, hire, develop and retain key personnel; the amount and timing of any repurchases of our common shares; potential significant deficiencies or material weaknesses in our internal control over financial reporting; and the risk that the Stelco Acquisition may not be consummated and if consummated, our ability to realize the anticipated benefits of the Stelco Acquisition. For additional factors affecting the business of Cliffs, refer to Part I – Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2023, our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024, and other filings with the U.S. Securities and Exchange Commission.
?
View source version on businesswire.com: https://www.businesswire.com/news/home/20240812201804/en/
MEDIA CONTACT:
Patricia Persico
Senior Director, Corporate Communications
[phone]
INVESTOR CONTACT:
James Kerr
Director, Investor Relations
[phone]

[abracky]

We should be at $40+ a share.

https://www.barrons.com/market-data/stocks/x/financials?amp%25252525252525253Bmod=md_home_hdr_search

[Saving Grace]

Adding massive debt to the equation. COGS skyrocket.

The plant is expected to come online in the first half of 2026.

Hurry up and wait or just wait, no hurry.

https://www.thefabricator.com/thefabricator/news/metalsmaterials/cleveland-cliffs-to-open-plant-in-west-virginia

[Saving Grace]

The $3,000 bonuses they gave to employees will have ramifications and the $100,000 they gave a foreign entity, during a period of war will also have it's ramifications.

Shareholders IMO will suffer in the end because of these stupid dumb mistakes.

The Brazilian CEO and his son, have no idea there will be consequences for their actions

[abracky]

TIME TO BUY BACK SHARES MY. CEO.

[Nebuchadnezzar]

exposed for what?

i get it, CLF is not trading well at all

[MadCityCyclone]

Down 42% from the 52 week high. It's not a hard calculation.

[Saving Grace]

And will drop even further when Concaves and his kid are exposed.

[Nebuchadnezzar]

CLF is almost down 50% from its recent highs

[abracky]

https://www.nwitimes.com/news/local/cleveland-cliffs-bullish-on-2-5-billion-stelco-acquisition/article_32c1d8f2-5342-11ef-b228-f373c8fb1753.html

[abracky]

https://www.wsj.com/business/energy-oil/cleveland-cliffs-in-2-5-billion-deal-to-buy-canadian-steelmaker-stelco-81ed7fa5?mod=business_lead_story

[Saving Grace]

Head Fake! When this hits $10, Concaves will realize hiring his son as CFO was a grave mistake for shareholders.

Must realize, that the Brazilian CEO and his son as CFO do not have shareholders best interest.

The squeaky wheel gets the grease, I know but their interests lie in Brazil, not the USA.

All steel stocks will take an at least 50% haircut before bouncing back and could fall even further.

[DewDiligence]

CLF independent director bought $116K of stock today on the open market:

https://www.sec.gov/Archives/edgar/data/764065/000076406524000169/xslF345X05/wk-form4_1722539569.xml

The director who bought today, John Baldwin, also bought $1M worth of stock on 6/13/24 (#msg-174593789).

Recap—CLF has had six insider buys since 5/1/24 totaling $2.6M of stock: $1M by the CEO (#msg-174587787); $100K by the CFO (#msg-174587787); and four purchases of a cumulative $1.5M by independent directors (#msg-174593789, #msg-174595056, and today’s transaction).

[Saving Grace]

First half of 2026

The plant is expected to come online in the first half of 2026.

Hurry up and wait or just wait, no hurry.

https://www.thefabricator.com/thefabricator/news/metalsmaterials/cleveland-cliffs-to-open-plant-in-west-virginia

[abracky]

https://www.thefabricator.com/thefabricator/news/metalsmaterials/cleveland-cliffs-to-open-plant-in-west-virginia

[abracky]

https://beyondspx.com/2024/07/28/cleveland-cliffs-inc-clf-a-diversified-steel-giant-poised-for-growth/

[abracky]

Wonder if he will take another $26,000,000 in salary again this year.

[Saving Grace]

And it's going to be rough like I said. Watch, Cliffs Shareholders will take a 50% Haircut when it plays out from paper to reality. Then what?

We're right back to the Halverson days of CCI. Taking on more debt with no short term rewards.

That would be about the time Dr. Concaves starts answering for his bonuses he lured employees in and the repercussion of that horrible mistake.

When it starts to unfold and SHTF, It may not be pretty.

[abracky]

Steel CEOs Say China Is Using Mexico to Evade U.S. Trade Laws

https://finance.yahoo.com/m/31c497f3-de79-3abf-80ad-8ff76be6ab3a/steel-ceos-say-china-is-using.html

[abracky]

Jefferies Reaffirms Their Buy Rating on Cleveland-Cliffs (CLF)

https://markets.businessinsider.com/news/stocks/jefferies-reaffirms-their-buy-rating-on-cleveland-cliffs-clf-1033589994

[abracky]

Cleveland-Cliffs, German Firm Commit to Transformers Projects in West Virginia, Georgia

https://www.industryweek.com/leadership/companies-executives/news/55128097/cleveland-cliffs-german-firm-commit-to-transformers-projects-in-west-virginia-georgia

[DewDiligence]

Absorbing Stelco shares will be rough for shareholders and could take years for any notable return.

Actually, the acquisition will be immediately accretive to EPS, as noted on slide #3 of https://d1io3yog0oux5.cloudfront.net/_5143a591af400ce308144b0fc4097f0e/clevelandcliffs/files/pages/clevelandcliffs/db/1118/description/Cleveland-Cliffs_Announces_the_Acquisition_of_Stelco_-_Slides.pdf .

[Saving Grace]

Absorbing Stelco shares will be rough for shareholders and could take years for any notable return.

[Saving Grace]

When this hits $10, Concaves will realize hiring his son as CFO was a grave mistake for shareholders.

Must realize, that the Brazilian CEO and his son as CFO do not have shareholders best interest.

The squeaky wheel gets the grease, I know but their interests lie in Brazil, not the USA.

All steel stocks will take an at least 50% haircut before bouncing back and could fall even further.

[DewDiligence]

CLF 2Q24 CC notes—note second bullet item re AI:

• The planned transformer facility in Weirton, WV (#msg-174789843) will generate $75-100M in annual EBITDA, yielding a payback period on invested capital of only 1.5-2 years.

• CLF’s intends to build additional transformer facilities (other than the one at Weirton) because the EBIDTA margins are high and the demand is expected to increase sharply as the US electrical grid is upgraded to support AI growth and other imperatives.

• CLF expects to ship at least 4M tons in each of 3Q24 and 4Q24.

• Essentially all of the accounting charges for idling the Weirton tinplate facility have already been taken.

• No antitrust issues are expected relating to CLF’s acquisition of Stelco (#msg-174755282) due to the small overlap in the specific segments of the steel industry served by each company.

• LG says the highest price he would now pay for US Steel—if the Nippon deal falls through—is $29/sh. (Take this with a grain of salt, LOL.)

CC transcript:
https://finance.yahoo.com/news/cleveland-cliffs-clf-q2-2024-171517332.html

[DewDiligence]

2Q24 results were not as bad as some investors expected, given the lower average price realization compared to prior quarters (#msg-174791870).

[DewDiligence]

CLF reports 2Q24 results:

https://www.clevelandcliffs.com/investors/news-events/press-releases/detail/645/cleveland-cliffs-reports-second-quarter-2024-results

All year-over-year comparisons (except volume shipped) are unfavorable due to the lower average price realization in 2Q24 compared to 2Q23. Still, 2Q24 was slightly better than some investors expected, which is why the stock is up ~3% in AH trading. CC Tuesday at 8:30am ET.


2Q24 highlights

• Revenue of $4.9B, -15% YoY

• Non-GAAP EPS of $0.11 (excluding a $0.11 impairment charge from the idling of the Weirton WV tinplate plant)* vs $0.28 in 2Q23

• Adjusted EBITDA of $323M, -58% YoY

• Free cash flow of $362M, -52% YoY

• Steel shipments of 4.0M net tons, +1% YoY

• 6/30/24 net debt of $3.4B, down $237M from 3/31/24 (despite repurchasing approximately $125M of CLF shares during 2Q24)


2024 guidance

• No updated or re-iterated guidance for 2024 steel shipment volume; the guidance given three months ago was 16.5M tons (vs 16.4M in 2023)

• Re-iterated cost reductions of ~$30 per net ton, corresponding to ~$500M adjusted EBITDA benefit compared to 2023

• Cap-ex guidance lowered $25M to $650-$700M (from prior range of $675-725M)


*See new plans for Weirton, WV site in #msg-174789843.

[Nebuchadnezzar]

stock is up after hours

rare

[DewDiligence]

CLF invests $100M—including $50M grant_from WV—to build new electrical transformer plant in Weirton, WV at the site of idled tinplate facility:

https://finance.yahoo.com/news/cleveland-cliffs-announces-state-art-110000609.html

Cleveland-Cliffs Inc. announced today that it will establish a new electrical distribution transformer production plant in Weirton, West Virginia.

…The total capital investment is $150 million, of which $50 million (or one third) will be granted by the state of West Virginia to Cliffs through a forgivable loan [i.e. a grant]. Cliffs expects the new plant to come online in the first half of 2026.

The efficiency standards for distribution transformers recently promulgated by the U.S. Department of Energy support the long-term utilization of highly-efficient American-made Grain Oriented Electrical Steel (GOES), ensuring the viability of this investment in Weirton.

This investment will result in reemployment opportunities for 600 USW-represented workers from the indefinitely idled Weirton tinplate mill (https://www.clevelandcliffs.com/news/news-releases/detail/622/cleveland-cliffs-to-idle-weirton-tinplate-facility ).

[Saving Grace]

Cleveland-Cliffs needs a climate plan for Stelco.

There is a ton of work ahead to be green steel competitive. HBI #2? will be costly and take years.

https://www.thespec.com/opinion/contributors/cleveland-cliffs-needs-a-climate-plan-for-stelco/article_fdf50fad-a44c-57df-9de3-8f37ae5d1bd8.html

[abracky]

Cleveland-Cliffs needs a climate plan for Stelco


https://www.thespec.com/opinion/contributors/cleveland-cliffs-needs-a-climate-plan-for-stelco/article_fdf50fad-a44c-57df-9de3-8f37ae5d1bd8.html

[abracky]

The Biden administration has introduced additional tariffs on Mexican imports that utilize Chinese steel and aluminum, reinforcing measures originally put in place by former President Trump.


Political and Economic Implications: The move aims to address loopholes exploited by Chinese manufacturers and support American steel and aluminum workers, particularly in states like Pennsylvania and Ohio. 


MxM News Share
Check out this article I found on MxM News: https://mxmnews.com/article/95736790-dc93-46a3-9476-01ddbb095662

[DewDiligence]

Correction—Based on today’s CC, it’s clear that CLF does still have an interest in acquiring US Steel at some point, but not in the near future.

[Saving Grace]

Concaves will need to answer for those crimes.

[DewDiligence]

With the Stelco deal announced today, it’s reasonable to assume that CLF no longer has any intention of pursuing US Steel.

[DewDiligence]

Slide #10 shows US/Canada steel production for the top-10 companies in the market. A combined CLF + Stelco will still rank #2 — trailing only Nucor — but it will be 50% ahead of the #3 company, Steel Dynamics.

[DewDiligence]

Addendum—You don’t see too many acquisitions that are immediately accretive to GAAP EPS, as CLF asserts that the Stelco deal will be in the post I’m replying to.

[DewDiligence]

CLF-STLC CC slides:

https://d1io3yog0oux5.cloudfront.net/_5143a591af400ce308144b0fc4097f0e/clevelandcliffs/files/pages/clevelandcliffs/db/1118/description/Cleveland-Cliffs_Announces_the_Acquisition_of_Stelco_-_Slides.pdf

[DewDiligence]

CLF insiders were actively buying shares on the open market only one month before the announcement of the Stelco deal, which is rather surprising—and patently bullish.

[DewDiligence]

CLF acquires Canada’s Stelco for $2.5B* cash/stock—an 87% premium to STLC.TO’s closing price on 7/12/24:

https://www.clevelandcliffs.com/news/news-releases/detail/643/cleveland-cliffs-announces-the-acquisition-of-stelco

Cleveland-Cliffs Inc…is pleased to announce that it has entered into a definitive agreement to acquire Stelco Holdings Inc. (TSX:STLC) ("Stelco"). The acquisition confirms Cliffs’ commitment and leadership in integrated steel production in North America, and also brings an additional 1,800 United Steelworkers ("USW") union employees into Cliffs’ workforce.

Under the terms of the agreement, Stelco shareholders will receive CAD $60.00 per Stelco common share in cash and 0.454 shares of Cliffs common stock per share of Stelco common stock (or CAD $10.00 per share as of July 12, 2024), representing a total consideration of CAD $70.00 per Stelco share.

The transaction has received full support from David McCall, International President of the USW union.

The transaction implies a total enterprise value of approximately USD $2.5 billion (CAD $3.4 billion) for Stelco and represents an acquisition multiple of 4.8x 3/31/24 LTM [last twelve months] Adjusted EBITDA with synergies. Cliffs has a clear line of sight to the achievement of approximately $120 million of estimated annual cost savings with no impact to union jobs.

The acquisition is expected to be immediately accretive to 2024 and 2025 EPS. The transaction implies pro forma net leverage of 2.4x 3/31/2024 LTM Adjusted EBITDA. Upon completion of the transaction, Cliffs shareholders will own approximately 95% and Stelco shareholders will own approximately 5% of the combined company, on a fully diluted basis.

Stelco is an integrated steelmaker consisting of two operational sites, both located in the province of Ontario: Lake Erie Works, the newest and lowest-cost integrated steelmaking facility in North America; and Hamilton Works, a downstream finishing and cokemaking facility. Stelco ships approximately 2.6 million net tons of flat-rolled steel annually, primarily hot-rolled steel to service center customers.

…Upon closing of the transaction, Stelco is expected to continue operations as a wholly-owned subsidiary, preserving the name and legacy of the business.

… The transaction has been unanimously approved by Cliffs’ and Stelco’s respective Boards… The transaction is expected to close in the fourth quarter of 2024, subject to approval by Stelco shareholders, receipt of regulatory approvals and satisfaction of other customary closing conditions.

*Enterprise value. The nominal deal value (i.e. the market value of the cash + stock consideration) is approximately $2.8B (C$3.85B). $1 = C$1.36.