US Steel Stock Jumps After Lawsuit Over Biden’s Nippon Steel Deal Block: Retail Torn Between Business Confidence, National Security
By Stocktwits Inc | First Published Jan 7, 2025, 9:33 PM ISTU.S. Steel and Nippon Steel have also sued Cleveland-Cliffs, its CEO, and a union leader David McCall over alleged coordinated efforts to block their merger.
U.S. Steel Corp. (X) shares climbed over 3% on Tuesday morning after the company, alongside Japan's Nippon Steel, filed lawsuits to contest President Joe Biden's decision to block their proposed merger.
The Biden administration had cited national security concerns in its decision, which the companies are now challenging in court, calling it an act of “unlawful political influence.”
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U.S. Steel and Nippon Steel have also launched a separate lawsuit against Cleveland-Cliffs Inc. (CLF), its CEO Lourenco Goncalves, and David McCall, president of the United Steelworkers union.
The suit alleges "illegal and coordinated actions aimed at preventing the transaction." Despite the legal actions, Cleveland-Cliffs shares rose 4.23% in early trade on Tuesday.
Cleveland-Cliffs’ CEO, Goncalves, dismissed the allegations as “completely baseless,” referring to the merger as a "doomed-to-fail cash-out sale to Nippon Steel." The United Steelworkers union has yet to comment on the lawsuits.
United Steelworkers has not yet issued a comment.
Retail investors on Stocktwits were split between whether or not the President made the right call.
According to an ongoing poll on the platform, 47% view the decision as ‘bad for business confidence’, while 40% agree with Biden’s decision to block the deal in order to safeguard national security.
The merger, under scrutiny since its December 2023 announcement, would elevate Nippon Steel to the position of the second-largest steelmaker globally, up from fourth place.
Since the deal was announced, it has faced pushback not only from President Biden, but also President-elect Donald Trump.
“I am totally against the once great and powerful U.S. Steel being bought by a foreign company,” wrote Trump on Truth Social last week. “Through a series of tax incentives and tariffs, we will make U.S. Steel strong and great again and it will happen FAST! As President, I will block this deal from happening. Buyer Beware!!!”
Most of the pushback from politicians stems from a preference for U.S. Steel to be U.S.-owned and for the U.S. to make its own steel.
On Stocktwits, retail sentiment around the company shifted to ‘bullish’ from ‘neutral’ a day ago, while message volumes remained at ‘normal’ levels.
One user on the platform hopes that the lawsuit will give the company some time to strike a deal with Trump once he takes office on Jan. 20.
However, another pointed out that a deal under the Trump administration is highly unlikely.
U.S. Steel’s stock has dropped 30% over the past year but has started the new year on a strong footing, gaining over 8.5% in the last five days.
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