Cleveland-Cliffs Shares Plunge Following Spectacular Rally

Cleveland-Cliffs shares endured a period of extreme volatility, culminating in a dramatic price reversal. The stock initially surged to a new annual peak before a severe downturn, triggered by a stark downgrade from a major financial institution, erased a significant portion of those gains.

The equity's upward trajectory was abruptly halted when Wells Fargo & Company slashed its rating on Cleveland-Cliffs from "Equal Weight" to "Strong Sell." This move sparked a substantial sell-off, causing the share price to plummet by 17.24% and close at $13.39. This decline followed a spectacular rally that had seen the stock climb 24.5% to reach a new 52-week high of $15.78 just the day before.

Q3 2025 Financial Performance

The company's recent financial results presented a mixed picture. For the third quarter of 2025, Cleveland-Cliffs reported an adjusted net loss of $223 million. While the loss per share of $0.45 slightly surpassed market forecasts, the revenue figure of $4.7 billion fell short of expectations. Operational data showed steel shipments of 4.0 million tons, with an average selling price of $1,032 per ton.

In response to current conditions, management has implemented several cost-cutting measures:
* Reduction of capital expenditure guidance to $525 million.
* Lowering of administrative costs to $550 million.
* Maintenance of the existing target to achieve $50 in cost savings per ton of steel.

Should investors sell immediately? Or is it worth buying Cleveland-Cliffs?

Strategic Shifts Fuel Initial Optimism

The preceding rally was fueled by a series of strategic announcements from the company that generated significant investor optimism. These initiatives pointed towards a broader diversification and strengthening of the business:

• A strategic exploration for rare earth elements at sites in Michigan and Minnesota.
• Securing a five-year contract valued at $400 million with the U.S. Department of Defense.
• Establishing new multi-year supply agreements with all major automakers, extending through at least 2027/2028.
• Plans to divest eight non-core assets with an estimated total value of $425 million.
• Signing a Memorandum of Understanding with a global steel producer.

Divergent Analyst Views and Future Catalysts

The market remains deeply divided on the company's prospects. While Wells Fargo and GLJ Research have issued sell recommendations, B of A Securities maintains a "Neutral" stance, and Goldman Sachs continues to recommend a "Buy." The overall consensus among market experts currently sits at "Hold."

Investor attention is now focused on two key upcoming developments that could influence the company's direction: the expiration of an unfavorable plate steel supply contract in December 2025 and the forthcoming details of the planned partnership with the global steel producer. The extreme price swings underscore the market's uncertain reaction to Cleveland-Cliffs' strategic repositioning.