Amid falling product prices due to rising imports, Bethlehem Steel Corp.'s stock dipped below $3 for the first time in its history yesterday, closing at an all-time low of $2.9375.
For less than the price of a latte, one can now buy into the nation's third-largest steel producer whose roots date back to 1857 and which once employed 130,000.
The venerable $4 billion company - which lost $183 million last year - now has a market capitalization of just over $380 million.
"It's not just Bethlehem, the total group of steel companies has lost a significant amount of market cap," said Michael F. Gambardella, an analyst at J. P. Morgan Securities in New York.
LTV Corp., for example, is in a similar predicament. The Cleveland steel company had sales last year of $4 billion and a net loss of $212 million. Its share price has fallen 80 percent in the past 52 weeks to close yesterday at $1.1875.
Even mini mill Nucor Corp., a $4 billion company that keeps costs down by using nonunion labor and by recycling scrap metal instead of making steel from scratch as Bethlehem does, has seen its share price drop 37 percent to $30.25 in the past 52 weeks.
U.S. Steel Group, with $5 billion in sales last year, has a share price drop of 40 percent to $15.25. But both Nucor, the No. 2 producer, and U.S. Steel, the No. 1 producer, made profits last year of $244 million and $44 million respectively.
Bethlehem's 20-year-high stock price of $31.75 was reached in March 1981.
Imported steel, which drives down prices in the United States, amounted to about 25 million tons a year in 1995 but is now projected to reach more than 40 million tons this year, says the U.S. Commerce Department.
Prices for domestic cold-rolled steel in the industry have fallen about $50 since early spring to about $400 a ton. Domestic hot-rolled steel fell about $100 a ton to about $260 a ton. That means that internal improvements, such as Bethlehem's new $300 million cold-rolled mill at Sparrows Point in Baltimore County, are not as helpful to the bottom line in these market conditions.
A spokeswoman for Bethlehem, which now employs about 15,000, said yesterday that the company has a policy of not commenting on the action of its stock.
With such a low market capitalization, Bethlehem is in danger of being kicked off the Standard & Poor's 500, said Andrew Buchner, vice president of Guzman & Co., a Miami brokerage.
Bethlehem has the second-smallest market capitalization on the S&P; 500, he said, behind only Owens Corning. But after the markets close tomorrow, Owens Corning will be replaced by Lucent Technologies spinoff Avaya Inc. - leaving Bethlehem in last place.
"Typically with the S&P; 500 you're talking about companies with market caps well into the billions," he said. "Bethlehem has slipped down to perhaps a mid-cap or more of a small-cap stock."
After a disappointing 1999, Bethlehem netted $13 million in the first six months of the year, not including $22 million in an unusual after-tax gain. But Duane R. Dunham, chairman, president and chief executive of Bethlehem, said last week that the third and fourth quarters will likely show weaker numbers.
"The company is still cash positive and it will come through the storm," said Brian L. Eisenbarth, an analyst at Collins & Co. LLC. "We've seen down cycles in steel before and it always eventually goes the other way. Demand will catch up and supply will go down and prices will rebound."