Cleveland-Cliffs CEO lashes out at Goldman Sachs analyst, short sellers

Cleveland-Cliffs CEO Lourenco GoncalvesBloomberg

The CEO of the American iron-ore mining company Cleveland-Cliffs took time out from his company’s third-quarter earnings call on Friday morning to attack an analyst from Goldman Sachs and short sellers. 

CEO Lourenco Goncalves stopped the call and said, “Matthew Korn, if you are in the call, it is still 10:42, why don’t you ask a freaking question? I will be happy to answer. Okay.”

He was referring to the Goldman Sachs analyst who covers his company and had an $11 price target — just below both the Wall Street estimate and where shares were trading at the time. 

After a few questions came from other analysts, Goncalves turned his attention back to Korn and also towards short sellers. Here’s a transcript of the call via Bloomberg (emphasis ours):

“It’s unbelievable that this big banks has still employ this type of people, you guys should resign for your lack of knowledge of things, because it’s not like you don’t understand, now you Lucas, you are one of the best, it’s not like you don’t understand our business, you don’t understand , you don’t understand your own business. You are a disaster. You are an embarrassment to your parents. With this being said, we are going to use money to reward the long-term shareholders. So if the stock continues to go down, based on these kids that play with computers and somebody else’s money, we are going to buy back stock. We are going to screw these guys so badly that I don’t believe that they will be able to only resign. They will have to commit suicide. So we are going to screw these guys so badly that it will be fun to watch. That will be my first priority other than the two top priorities of finishing HBI and paying down debt. You are messing with a wrong guy. That’s my message to you.“

“Lucas, it will all be done to inflict maximum pain to these guys. I wake up in the morning every day, looking at these guys and I’ll go to bed at night every day thinking about this guys. And that’s a bad place to be. That’s the message that I would like to deliver in this call.

When asked by Bloomberg’s Joe Deaux about why he had taken aim at Korn, Goncalves didn’t hold back. “The Goldman Sachs commodities desk has been wrong about iron ore prices, years in a row,” he said.

“Last year in the Goldman Sachs annual conference, I called him out and I said, ‘next year you’ve got to come here to the stage and let’s debate iron ore on the stage.’ And I called them out and I reminded Matthew Korn, because the conference is coming, reminding Korn that this year he’s going to have to bring his big brother from the commodities desk because I want to debate them in person, live. Let’s see who’s right and who’s wrong.”

It’s not the first time Goncalves has had a contentious moment with an analyst on an earnings call. In October 2014, he refused to answer Wells Fargo analyst Sam Dubinsky’s question, saying “you already know everything about my company.”

He added: “You have a $4 price target and you think we can’t sell assets, so I’m going to take the next question, I’m not going to answer you.”