ArcelorMittal SA (NYSE:MT) Shares Fall 10% After Announcement of $3 Billion Stock Offering

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ArcelorMittal SA (ADR) (NYSE:MT) stock is falling heavily today, after the company announced plans to issue $3 billion in shares to help strengthen their weakening balance sheet. The company has blamed cheap Chinese steel exports for the issues that they have seen over the past few months. With its stock dropping nearly 60% over the past year, something needed to be done for the company to stay afloat.

Chinese exports have been the leading culprit in reducing steel prices to their 12-year lows, not exactly something a company like ArcelorMittal SA (ADR) (NYSE:MT) wants to see. While an additional stock offering certainly won’t make investors happy in the short term, it may be the best solution for long run growth and profit generation.

The stock is down 9.93% or $0.41 following the news, hitting $3.72 per share. About 25.65 million shares traded hands or 147.35% up from the average. MT has declined 57.16% since July 1, 2015 and is downtrending. It has underperformed the S&P500 by 49.86%.

From a total of 7 analysts covering Arcelormittal (NYSE:MT) stock, 3 rate it a “Buy”, 1 a “Sell”, and 3 a “Hold”. This means that 43% of the ratings are positive. The highest target price is $13 while the lowest target price is $3. The mean of all analyst targets is $6.13 which is 64.78% above today’s ($3.72) stock price. Arcelormittal was the topic of 17 analyst reports since July 21, 2015 according to the firm StockzIntelligence Inc. Jefferies downgraded shares on January 13 to a “Underperform” rating. HSBC downgraded MT stock in a recent report from December 7 to a “Hold” rating. Finally, Berenberg initiated the stock with a “Buy” rating in a report they issued on an October 14.

ArcelorMittal SA is a holding company. The company has a market cap of $7.38 billion. The Firm is a steel and mining company, which operates through five divisions: NAFTA; Europe; Brazil; Africa and Commonwealth of Independent States (ACIS), and Mining. It currently has negative earnings. The Firm produces a range of finished and semi-finished steel products.

#focuskw=’ArcelorMittal SA (ADR) (NYSE:MT)’##metadesc=’ArcelorMittal SA (ADR) (NYSE:MT) stock is falling heavily today, after the company announced plans to issue $3 billion in shares to help strengthen their weakening balance sheet. The company has blamed cheap Chinese steel exports for the issues that they have seen over the past few months. With its stock dropping nearly 60% over the past year, something needed to be done for the company to stay afloat.

Chinese exports have been the leading culprit in reducing steel prices to their 12-year lows, not exactly something a company like ArcelorMittal SA (ADR) (NYSE:MT) wants to see. While an additional stock offering certainly won’t make investors happy in the short term, it may be the best solution for long run growth and profit generation.

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