Fortescue Metals Group Limited (ASX: FMG) has extended its slide today, slipping 3.4% to be trading at $2.01. Although it has recovered marginally since hitting a near six-year low yesterday at $1.92, the stock remains 68% in the red since peaking in February last year.
The heavy falls have come as a result of the sharp decline in the iron ore price. Over the last 13 months, the commodity has more than halved in value, impacting companies such as Fortescue and Arrium Ltd (ASX: ARI), which both maintain high-cost operations.
While it is thought that Fortescue is still making a profit with iron ore at around US$64 a tonne, its margins are being heavily squeezed and making it increasingly difficult to repay its heavy debt load. With iron ore tipped to slip further in 2015, it seems that investors would be wise to ignore the lure of Fortescue and focus on other compelling investment opportunities.
