Shares of iron ore producer and steelmaker Cleveland-Cliffs (NYSE: CLF) fell a little more than 10% as trading got underway on Feb. 9. An hour into the trading day, the stock was still off by around 9%. There were three pieces of relevant news here.
First, Cleveland-Cliffs announced after the market close on Feb. 8 that it was selling 20 million shares of stock. The cash raised from the sale is slated for debt-reduction efforts. However, the move will dilute current shareholders , a situation that is usually not welcomed by investors. Second, it also announced that ArcelorMittal (NYSE: MT) would be selling 40 million shares it owns following the sale of North American steelmaking assets to Cleveland-Cliffs . Cleveland-Cliffs won't see any of that cash. It's not shocking that a sale of this scale would put downward pressure on the stock.
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For further details see:
Why Cleveland-Cliffs Stock Plunged 10% in Early Trading Today