Cliffs Natural Resources Parabolic Move following news of decision on Bloom Lake mine shows what can happen to a very heavily shorted stock

Cliffs Natural Resources Inc.

has fallen over 30 percent this week as news that its Bloom Lake Mine is going through restructuring along with the decline in iron ore prices has lowered expectations on the company's profitability. Currently over 43 percent of the company's shares are being shorted and the steep weekly decline shows the risks of investing in a heavily shorted stock. In a statement Cliffs Natural Resources said that the company will restructure its Canadian Bloom Lake iron-ore mine, saying the business has stopped generating revenue and can no longer meet its financial obligations. A bankruptcy filing for Bloom Lake may limit the cost of closing the operation, which Cliffs natural resources estimated in November would be as much as $700 million. Lourenco Goncalves, Chairman of the Board, President and Chief Executive Officer of Cliffs Natural Resources Inc. said, "For several months, we have been seeking equity investors and exploring sale options for Bloom Lake including working collaboratively with Investissement Québec. We support the decision by the directors of the Bloom Lake Group to conduct a restructuring process under the supervision of the Court." Further driving down the stock is the decline in the value of iron ore. Prices of the steelmaking ingredient closed at $62.70 a ton on Wednesday, its lowest price in six years. On Thursday Cliffs Natural Resources closed at $6.11, down 7.70 percent.