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Cleveland-Cliffs Survives Legal Storm: What’s Next?

Bryce TuoheyAvatar
Written by Bryce Tuohey Reviewed by Tim Sykes Fact-checked by Matt Monaco
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Cleveland-Cliffs Inc.’s stock took a hit following news of upcoming steel contract negotiations and concerns about weakening demand in the steel industry; on Monday, Cleveland-Cliffs Inc.’s stocks have been trading down by -3.96 percent.

Current Events Impacting Cleveland-Cliffs

  • CEOs of both Nippon Steel and United States Steel allege Cleveland-Cliffs played an illegal role in blocking the acquisition of U.S. Steel. Their ongoing lawsuit could deeply affect the financial landscape for both U.S. Steel and Cleveland-Cliffs.
  • CLF stands firm in its defense, arguing that Nippon Steel’s legal action is merely a smoke and mirrors tactic to cover its operational shortcomings.
  • There is concern regarding Cleveland-Cliffs’ focus on thwarting Nippon’s plans, with claims surfacing from U.S. Steel and Nippon Steel prompting a deeper look into CLF’s activities.

Candlestick Chart

Live Update At 14:31:59 EST: On Monday, February 03, 2025 Cleveland-Cliffs Inc. stock [NYSE: CLF] is trending down by -3.96%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Recent Financial Dynamics of Cleveland-Cliffs

As any experienced trader will tell you, success in the market requires more than just skill and knowledge; it demands discipline and patience as well. This means sometimes waiting for the right moment is more important than constant action. As millionaire penny stock trader and teacher Tim Sykes says, “Be patient, don’t force trades, and let the perfect setups come to you.” By practicing patience, traders can learn to recognize the patterns and signals that indicate a truly advantageous position, rather than impulsively jumping into trades that might not serve them well in the long run. In this way, traders can improve their chances of success and thrive in the challenging world of trading.

To get a sense of the current financial pulse and shortcomings of Cleveland-Cliffs, let’s dive into a briefing of their numbers. The recent earnings report doesn’t paint a very rosy picture. Revenues clocked in at approximately $21.99 billion, yet profits are missing in action. The firm has been wrestling with negative net incomes and hefty debt loads. As evidenced by the negative EBIT margin of -1.8% and a pretax profit margin of 6.6%, things look a tad complicated.

Its grand total of liabilities stands at a staggering $16.79 billion, signaling a high debt burden. Meanwhile, operating cash flow plunges into the negative territory with -$84M. The capital expenditures soar to $151M which continues to weigh down free cash flow. This is certainly eyebrow-raising; especially when combined with a current ratio of 1.9 indicating slightly precarious liquidity management.

On January 30th, 2025, CLF stock closed near $10.49 after an erratic trading day. The intraday charts speak of fluctuating volume and prices – swinging between $9.83 and $10.21. Such price oscillations were likely caused by investor nervousness stemming from ongoing lawsuits, adding further complexity to the stock’s fortunes.

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Looking at the financial ins and outs, CLF’s metrics suggest a bumpy ride ahead. Poor earnings track record signals potential problems. With debt escalating, the company must find ways to stabilize its finances for long-term growth.

Potential Aftereffects of the Turbulent Legal Challenges

The sticky legal entanglements surrounding Cleveland-Cliffs is where the current buzz lies. As lawsuits fly from Nippon Steel and U.S. Steel, there’s an undeniable air of uncertainty swirling around CLF’s operations. The incessant legal challenges may drag down its stock price as investors assess the fallout.

Both Nippon Steel and U.S. Steel allege Cleveland-Cliffs tried to block Nippon’s acquisition of U.S. Steel. These lawsuits underscore tensions and highlight questions of fair competition within the steel industry. Such high profile allegations could lead to reputational damage and potential regulatory scrutiny over CLF’s competitive practices.

CEO’s role complicating corporate decisions further clouds the company’s image. The courtroom dramas might metastasize concerning partnerships, with potential adverse impacts on future ventures and relationships. As these allegations unfold, stockholders are left querying if this legal quagmire could weaken CLF’s market standing.

Amidst the uncertainty, Cleveland-Cliffs exemplifies resilience, though it must tread cautiously. Ensuring transparent and equitable practices and resolving these political quagmires swiftly could be key to restoring investor confidence.

Market Movements and Investor Considerations

The seesaw movement characterizing CLF’s stock is partly attributed to its tumultuous legal battles. Moving forward, everything hinges on how effectively Cleveland-Cliffs confronts these allegations and subsequently restructures any potential setbacks it faces.

Considering the market, some traders may perceive it as a risky proposition in light of the swirling legal issues. Others may see an opportunity, hoping for a positive turnaround and anticipating an eventual resolution to legal problems.

In navigating this tense scenario, Cleveland-Cliffs must adapt its strategies to lean towards operations that drive profitability. With developments unfolding rapidly, remaining informed and vigilant is key for those interested or trading CLF stock. As millionaire penny stock trader and teacher Tim Sykes says, “It’s not about how much money you make; it’s about how much money you keep.” This mindset highlights the importance of not only profiting from market moves but also wisely managing risks associated with speculative trading.

As steel remains foundational, the potential for recovery exists, contingent on CLF successfully overcoming its current hurdles. If you’re holding on to stock, you might want to keep abreast with the latest developments, while potential buyers might consider waiting for more clarity. It’s a balance between potential growth opportunities and present market volatility.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”