I'll be curious to see the market impact of CLF's PR foreshadowing the GAAP write-down's detailed in #msg-83777212.
CLF has already experienced a substantial devaluation of its market value in the past 6 months; a devaluation that has not had a meaningful correction even though there is increasing optimism concerning near-term spot iron ore prices. So... it is possible that the bad news is already priced in. On the other hand, the non-cash write-down of deferred tax assets caught me by surprise and like you say in #msg-83777212 it suggests a tempered forward guidance at the next conference call...
The cash write down relating to the Quebec iron-ore business is consistent with the recent trend in announcements from CLF and, I believe, is likely priced into the stock.
In the near term, I am more curious to see what dividend the Board recommends based on yesterday's (or perhaps, today's) board meeting...
Regarding the significance of this being Timothy Sullivan's first meeting with the Board and the possibility that CLF is cleaning up its balance sheet for a sale... That is possible... However, I expect that it is more likely that Sullivan's impact on the Board decision to take the non-cash write-down's now relates to his assignment to the Audit Committee, that is if he had any impact at all.
On a more personal note, the release of this PR tends to confirm my growing feeling that CLF's management is unrealistically optimistic. In particular, I feel that they put their credibility on the line when they made a very emphatic statement at the investor day meeting that Bloom Lake costs would be reduced by 1/3 to $60-65/ton by the end of Dec 2012 (detailed in #msg-78258185). The chances of this having happened seems unlikely since most of that cost saving was attributed to a likely production volume increase that would dilute fixed costs. ....
Management's credibility will be irretrievably damaged (IMO) if the dividend is not maintained....
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