Why AK Steel Holding Corporation (NYSE:AKS) Declined Over 10%?

AK Steel Holding Corporation (NYSE:AKS)

In yesterday’s trading session, the stock price of AK Steel Holding Corporation (NYSE:AKS) declined more than 10% to close the day at $7.41. The decline came at a share volume of 8,500 compared to average share volume of 17.87 million.

The buzz

There doesn’t appear to be any company specific news announced on the back of which this decline was recorded. President Trump is taking back his initial promise to use pipe that’s made in the U.S. to build the Dakota and Keystone Access pipelines. It reported that these won’t be the only large infrastructure assignments moving forward under the Trump management that won’t be utilizing U.S. steel products to establish their steel bones.

Earlier, the New York Daily News stated that the $4 billion assignment to upgrade LaGuardia airport will put steel made in Canada to establish part of its Terminal B, and also Chinese steel to construct its roadway bridges.

The Port Authority of New Jersey and New York insists that its use of Chinese and Canadian steel is in compliance with its obligations to utilize 50% domestic steel. Nevertheless, a realization may be beginning on shareholders who leapt to purchase steel shares following Trump’s election: Just because the U.S. President has been discussing up U.S. steel doesn’t indicate steel consumers will bite the bullet and purchase U.S. steel when it is possible to buy it cheaper from somebody else.

The U.S. is a market economy, and AK Steel Holding Corporation (NYSE:AKS) had to compete on price if it intends to win business. For investors in a firm that lost $7.7 million in spite of selling $5.9 billion in steel preceding year, the prospect of lowering prices even more to compete may not seem extremely appealing.

More recently, the company reported that its subsidiary unit, AK Steel Corporation has successfully priced public offering of $400 million aggregate principal sum of 7% senior notes outstanding 2027.

AK Steel Holding Corporation (NYSE:AKS) will compensate interest on the Notes twice a year, in March and September of each year. The maturity date stands at March 15, 2027 while interest on the lately issued Notes will grow from March 23, 2017. The “Notes” will be fully and categorically guaranteed by direct parent of company, and by AK Tube LLC, Mountain State Carbon, LLC and AK Steel Properties, Inc. three subsidiaries of AK Steel. These notes will be marked as unsecured senior obligations of company and the Guarantors.

3/21/2017
Ticker Symbol AKS
Last Price a/o 3:21 PM EST  $7.41
Average Volume 19.81M
Market Cap (mlns)  $2.33B
Shares Outstanding (mlns) 314.16M
Share Float (mlns) 309.63M
Inside Ownership 0.70%
Short Float 15.71%
Short Interest Ratio 2.46
Quarterly Return -28.61%
YTD Return -27.42%
Year Return 73.13%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Author: Monica Gray

Monica has an undergraduate degree in Accounting and an MBA she earned - with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.

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