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Cleveland-Cliffs Inc.: Facing Challenges and Uncertainties

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Written by Bryce Tuohey Reviewed by Matt Monaco Fact-checked by Bryce Tuohey
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Cleveland-Cliffs Inc. stocks have been trading down by -4.78 percent amid weakening global demand for steel products.

Turbulent Times for Cleveland-Cliffs Inc.

  • A recent earnings report reveals Cleveland-Cliffs Inc. faced a tough first quarter in 2025. The company disclosed a significant GAAP net loss of $483M, although revenues rose to $4.6B from the earlier $4.3B benchmark. Efforts to reduce costs are underway, with several facilities slated for closure aiming for savings over $300M.

  • Federal securities laws may have been breached, prompting an investigation into Cleveland-Cliffs following an unforeseen loss and a stark 11% year-over-year revenue drop. The company plans to shut down six of its steel plants.

  • Leading legal firms, including Pomerantz Law Firm, have joined the fray, suggesting possible fraudulent actions or misconduct based on Cleveland-Cliffs’ unexpected losses and revenue deficits in the first quarter of 2025, with resulting stock price declines.

  • Persistent pressures from the steel market, including pricing challenges and rising costs, have resulted in a more than doubled adjusted EBITDA loss for Cleveland-Cliffs. Plant idlings have been announced as a measure to cut costs, with hopes for an EBITDA rebound by 2026.

Candlestick Chart

Live Update At 14:32:20 EST: On Wednesday, May 28, 2025 Cleveland-Cliffs Inc. stock [NYSE: CLF] is trending down by -4.78%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Recent Earnings: A Deeper Dive

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Cleveland-Cliffs Inc., known for its vast role in the steel industry, recently reported a challenging first quarter. Facing a GAAP net loss of $483M, an uptick from the previous year’s metrics was observed when total revenues climbed to $4.6B. However, this study’s increase didn’t spare the company from deeper issues.

Key financial maneuvers are in play. Facility closures are part of a plan to cut costs. These tough choices, albeit necessary, may result in annual savings of over $300M, though the long-term impact remains speculative. Job markets in affected areas could feel the pinch, reflecting the gritty realities of such industry transitions.

Financial health indicators show concerning trends. The EBIT margin stands at -8%, and operational struggles are highlighted by a decrease in YoY revenue by 11%. Looking closer, we see that Cleveland-Cliffs is attempting to arrest the financial slide by resizing its operations—a sensible yet tough decision.

In light of these pressures, let’s inspect some key metrics. A price-to-book ratio of 0.5 can make Cleveland-Cliffs’ shares seem appealing; however, with a gross profit margin of 100%, some might feel reassured. Yet, with a debt-to-equity ratio at 1.22, we see balancing acts between leveraging and liquidity management.

More Breaking News

A Closer Look at Legal Investigations

An ominous cloud of legal scrutiny looms over Cleveland-Cliffs as key entities such as Pomerantz Law Firm and other notable names dive into potential violations of federal securities laws. Negative outcomes in these investigations could further destabilize elective mandates within the company.

These potential violations arose after disclosing larger-than-expected losses, coupled with a marked revenue downturn. Consequences include an announcement to idle six steel plants, which may present operational challenges. As these probes unfold, stakeholders anxiously await clarity and resolutions.

Gazing into the future, Cleveland-Cliffs hopes for EBITDA improvements by 2026, but present-day challenges act as formidable hurdles. Amidst current market conditions, other legal and operational pathways continue to garner attention and concern.

Key Takeaways From Financial Statements

Financial reports reveal underpinned turbulence across all key areas. The company reported sizable operational cash flow deficits alongside remarkable adjusted losses. In March 2025, Cleveland-Cliffs recorded negative free cash flow ($503M), underlining severe concerns over liquidity, capital maneuvers, and market adaptability.

With a restructuring-focused approach, Cleveland-Cliffs strategically focuses on fiscal recovery whilst navigating through profound adversities. From the recently revealed income statements, diluted earnings per share settled at a troubling mark of -$1. The company’s standing went from profitable to grappling under debt constraints and operating losses.

The upcoming landscape appears uncertain. Despite efforts geared towards austerity, combined market constraints and legal implications pose unequivocal challenges.

Conclusion: Playing the Waiting Game

In this tangle of financial maneuvering, market volatility, and legal exploration, Cleveland-Cliffs grapples visibly on numerous fronts. Key players are watchful as the company seeks cost-efficiency and eventual financial recovery. As millionaire penny stock trader and teacher Tim Sykes says, “There is always another play around the corner; don’t chase just because you feel FOMO.” This advice resonates with the company’s need for a responsive, calculated approach in light of the ongoing challenges. A responsive, calculated approach becomes indispensable as industry observers and stakeholders assess avenues of recovery while a notable legal storm brews. As Cleveland-Cliffs attempts to navigate its way through the storm, only time will reveal the next series of events shaping this industrial titan’s journey towards recovery and growth.

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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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 .

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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”