Cliffs Natural Resources Inc. Up Sharply: Shorts Closing Out?

Cliffs Natural Resources Inc.

extended its gains Tuesday and is up about 30 percent since last week, apparently the result of short sellers closing their positions. Short interest in the Cleveland-based iron and coal mining company amounted to 59.8 million of its 153.2 million shares outstanding as of Sept. 30. Cliffs it a low last week of around $7 a share, badly hurt by a price slump for its products. The has been working since August to sell its iron mines in Australia and Applacian coal mines, while planning to stick with core-asset iron mines in Minnesota and Michigan. There's no deadline on the sale, Its recently appointed Chief Executive Lourenco Goncalves told The Wall Street Journal last week. At least four stock analysts have downgraded Cliffs in recent days, citing the outlook for iron ore. Activist investor Casablanca Capital LP, which successfully concluded a proxy battle for board representation with Cliffs earlier this year, filed a so-called stand-still agreement with the company Tuesday, pledging to acquire no more than 20 percent of Cliffs shares until at least 2016 and to reimburse the company for $2.55 million related to the proxy contest. Nearing Tuesday's close, Cliffs traded at $9.28 a share, up 12.5 percent.