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U.S Steel's $14.9 Bln Merger with Nippon Faces White House BlockOverview: U.S. Steel’s proposed $14.9 billion merger with Nippon Steel is facing a major roadblock as President Joe Biden is reportedly set to block the bid, citing national security concerns. This development follows intense scrutiny from the White House, labor unions, and bipartisan political opposition, throwing the future of the deal into uncertainty. Merger Background Nippon Steel, Japan’s leading steelmaker, announced its intention to acquire U.S. Steel in December 2023 with the goal of creating a global steel giant. The proposed $55-per-share offer promised significant enhancements to U.S. Steel’s production capabilities, technological innovation, and overall competitiveness, especially against state-supported competitors like China. Despite these promises, the merger faced hurdles, including regulatory reviews and objections from U.S. labor unions concerned about job security and mill closures. U.S. Steel shareholders supported the merger in April 2024, and regulatory approvals from other countries were secured, but the U.S. approval remained elusive. White House Intervention and National Security Concerns: Two sources familiar with the situation revealed that President Biden plans to block Nippon Steel's acquisition, emphasizing the potential national security risks. The Committee on Foreign Investment in the United States (CFIUS) still needs to make its recommendation, but there’s growing speculation that the President’s stance may influence the committee’s final decision. This situation highlights a significant geopolitical dimension, with the U.S. government wary of foreign influence in critical industries, particularly from non-allied nations. The Biden administration's concern centers on maintaining control over domestic production capabilities vital to national security, especially amid rising tensions with state-backed Chinese competitors. Market Reaction and Investor Concerns: U.S. Steel’s stock experienced a sharp decline, closing at $29.38, which is approximately 47% below Nippon Steel’s $55-per-share offer. This wide deal spread reflects investor skepticism that the merger will proceed. Merger arbitrageurs noted that while CFIUS typically recommends action before the President makes a decision, the current scenario appears reversed, adding to market uncertainty. Frederic Boucher, a merger arbitrage specialist, remarked, “Is the President trying to pressure CFIUS into recommending the deal should be blocked? Investors aren’t waiting for clarification and are exiting quickly.” This sentiment is evident as options trading volume on U.S. Steel surged, reflecting heightened bearish bets on the stock. Potential Impact on U.S. Steel: The failure of the merger poses serious implications for U.S. Steel’s future operations. The company has warned that a collapse could jeopardize thousands of union jobs and lead to the closure of some mills. U.S. Steel also highlighted the potential shift of its Pennsylvania headquarters, a move that could disrupt local economies and the broader U.S. steel industry. Nippon Steel had committed over $2.7 billion in investment in U.S. facilities in Pennsylvania and Indiana, contingent on the deal’s approval. Without the merger, these investments are at risk, further straining U.S. Steel’s ability to modernize and compete globally. Technical Analysis: From a technical perspective, U.S. Steel ( NYSE:X ) shares are navigating volatile trading conditions. The stock fell by 17% in extended trading on Wednesday but showed some resilience, rising 2.11% in Thursday’s premarket session. The price movement suggests a potential bullish reversal pattern could emerge if normal trading supports this premarket rally, especially if investor sentiment stabilizes. Outlook: The unfolding situation underscores the complexities of global mergers in strategic industries, particularly when national security considerations are at play. For U.S. Steel, the road ahead is fraught with regulatory hurdles, and the Biden administration’s position is a critical variable that could shape the company’s future trajectory. Investors will need to closely monitor further developments, particularly the CFIUS decision and any official announcements from the White House. As the debate continues, the broader implications for U.S. industrial policy and foreign investments in critical sectors remain a focal point for market participants.
NYSE:X
by DEXWireNews
United States Steel Corporation opening high and rising highUnited States Steel Corporation opening high and rising high This chart shows the weekly candle chart of the stocks of American steel companies in the past four years. The graph overlays the bottom to top golden section at the beginning of 2020. As shown in the figure, due to the stimulation of the acquired bullish news, the stocks of American steel companies opened short and high this week, opening high and rising high, directly piercing multiple pressure levels upwards! With the merger trend between traditional heavy industries starting, there will be more and more old industry leaders experiencing similar situations in the future!
NYSE:X
by Think_More
Taking a close look at US STEEL XI really like US STEEL down here. I've had my eye on this one for some time but the trend is still technically pointing down. Following the price direction and watching strength/momentum is key. I can speculate and say this is an excellent buy (I think it's fantastic).. However, the trend is still pointing down even though I see value here. Notice the hidden bearish divergence it's been forming for months..Be smart and stick to price direction. It could flush 50-60% lower before finding a final bottom..In my opinion it might be best to wait for confirmation of trend change and strength.
NYSE:X
by gghsusa
12
US steel could be reversing soonWhile the macro has been bringing bearish news, you can’t cover your ears when the TA gods reach out. Reasons for reversal: - price near .886 pcz of huge weekly harmonic - weekly bullish divergence on both indicators - daily and 4h divergence on macd - daily gap to fill at $13 - Trump to further deregulate US menufacturing This should be a position trade held for over one year, leverage not recommended. Disclaimer: this is not financial advice, please do your own research before opening a position Hey everyone! If you enjoyed the idea please give a like and a follow. Appreciate the support and much more to come :)
NYSE:XLong
by Eldtrades
THE WEEK AHEAD: AAPL, EBAY, TSLA, X, AMD, FB EARNINGSEARNINGS: Here are the stocks that announce earnings this week that are of most interest to me from a volatility contraction play standpoint: AAPL (85/35), Tuesday, After Market Close. EBAY (82/34), Tuesday, After Market Close. AMD (56/59), Tuesday, After Market Close. TSLA (80/75), Wednesday, After Market Close. FB (54/33), Wednesday, After Market Close. X (55/61), Thursday After Market Close. Although TSLA has the greater than 70% rank/greater than 35% 30-day metrics I generally look for in these plays, its liquidity leaves something to be desired, although I'm naturally looking at after hours quotes here, and they're showing unattractively wide. From a "bang for your buck standpoint" (credit received as a function of share price), the most attractive plays are in AMD and X with their respective February at-the-money short straddles paying 6.39 (12.7% of share price) and 1.25 (13.3%). Pictured here is a delta neutral AMD February 21st (26 day) 43/60 short strangle, paying 1.29 at the mid price with delta/theta metrics of -.21/6.69 and break evens wide of the expected move on both sides. With AAPL and FB, I'm more likely to go out to March to collect a little more and have more room to be wrong, in spite of the fact that volatility contraction is likely to be more muted, with the AAPL March 20th 285/355 15 delta short strangle paying 6.75 and the FB 195/240 paying 4.64. EBAY doesn't appear to be paying more than 1.00 for a 16 delta, so I'm unlikely to partake unless volatility dramatically ramps up here in the next couple of days. EXCHANGE-TRADED FUNDS (SCREENED FOR THOSE PAYING >10% IN CREDIT RELATIVE TO STOCK PRICE IN <180 DAYS UNTIL EXPIRY): USO (54/35), March FXI (53/24), June XBI (50/30), June XLE (32/19), July EWW (31/18), June SMH (28/24), May XOP (25/32), March GDXJ (23/29), May GDX (20/26), May EWZ (13/25), June Here, the rank/30-day ideal is >50, >35%, with only the peskily small USO meeting those criteria. It's just one of those periods when single name premium selling is paying in shorter duration, but exchange-traded sector and broad market funds are not, at least in the 45 day wheel house. Consequently, it's a Hobson's choice of either (a) selling premium in single name; (b) selling sector/broad market, but of longer duration; or (c) hand-sitting. I'm kind of opting for a little of single name and a little of longer duration sector stuff just to keep the theta on and burning. BROAD MARKET (SHOWING EXPIRY THAT PAYS >10% IN CREDIT RELATIVE TO STOCK PRICE): EEM (34/19), September QQQ (25/19), September IWM (26/17), September SPY (21/14), November In spite of the little volatility pop we had last week, duration that pays remains duration that is hugely long ... . VIX/VIX DERIVATIVES: VIX finished the week at 14.56, with front month /VX futures contracts going for 16.05, 16.26, and 16.72 in February, March, and April respectively. If the volatility hangs in there through next week, I may consider adding a small number of units to my VXX short position. Naturally, the pop isn't massive, so I don't want to go all in as though "this is it," since there could be more volatility ahead. By the same token, there could be less, since market memory tends to be short.
NASDAQ:AMD
by NaughtyPines