Digging the dirt and selling for big bucks is a good profitable business, but not for Fortescue Metals Group (FMG), a business with higher than average costs, a lower quality product and a balance sheet with a lot of debt.
Just last week Fortescue assured investors it expected a rebound in the iron ore prices, and today the company slashed $1.5 billion from expansion plans and announced it's axing hundreds of jobs.
For Fortescue investors who bought the company shares during the very, very "good" times, and lived on the speculation that company is optimistic on growth and expansion, there is only one way for them:
To hell ...
I'd love to know on what basis they made this projection. Their economist has obviously been smoking too much of the happy stuff.