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Carl Icahn’s war with Commercial Metals highlights speculation in metal (CMC, JJC)

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Profits from arbitraging Commercial Metals Co. ( CMC , quote ) still exist with uber investor Carl Icahn's offer of $15 a share. Icahn already owns 10% of CMC stock and its iron and steel recycling operations around the globe. As reported previously , Icahn wants to merge Commercial Metals with a company he already owns.

In an open letter to the CMC board, Icahn has given them until 9 ET Monday to act or "we intend to take matters into our own hands."

That will certainly not mean the offer will be withdrawn or the tender price lowered.

If Icahn goes hostile, the bid price should rise, increasing arbitrage profits. Speculation over metals remains hot, especially in copper, where the exchange-traded fund JJC ( JJC , quote ) ended up almost 10% last week.

As detailed in an article on www.emergingmoney.com , this short squeeze in copper appears to be the result of Beijing making its weight felt in the commodity markets again.

As the largest consumers in the world (China, Europe, US, India) are all reporting or projecting lower economic growth, the JJC gains 10% in one week.

That should not be happening unless either the speculators are getting ahead of themselves or the long-term fundamentals are better than the headlines would have you believe.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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