You know how Dryships ended up,* right?
From FreightWaves, June 26:
Shipping shares plunge, day trading heats up
A decade after the Great Recession, shipping stocks once again wallow in a sea of red, with yet another plunge on Friday due to coronavirus fears.
There’s a sense of deja vu, not just because there’s another global crisis, but because there has been so little evolution in the public shipping space over the past 10 years. Shipowners on Wall Street were supposed to mature into the kind of blue-chip, consolidated, corporate, creditworthy, non-conflicted investment vehicles that are coveted by the long-only funds of Boston and New York.
It never happened. Market caps remain minuscule, more offerings are being done by penny stocks, reverse stock splits are increasingly common and equities are being driven by the “retail bros,” not the “suits.”
Rise of retail interest
Nordic American Tankers (NYSE: NAT) CEO Herbjorn Hansson appeared on Jim Cramer’s CNBC show Mad Money on April 24. On April 26, around $900 million in NAT shares traded hands (NAT’s market cap is around $600 million). NAT’s shares doubled in the month of April, and an analysis by investment bank Evercore ISI showed that NAT shares were, to a large extent, traded on the Robinhood retail platform.
The spotlight has now turned to Seanergy (NASDAQ: SHIP), a penny-stock owner of Capesize bulkers (dry bulk vessels with a capacity of around 180,000 deadweight tons).
On one hand, Capesize spot rates have jumped from lows of around $2,000 to nearly $30,000 per day and Seanergy is heavily spot-exposed. On the other, management confirmed on Friday’s quarterly call that a refinancing deal had yet to be finalized on $29 million in debt maturing this month, and CEO Stamatis Tsantanis would not provide guidance on the second quarter — even though it’s almost over.
Now-infamous day trader Dave Portnoy tweeted on Tuesday that he had bought Seanergy because he liked cruise stocks, wanted all ship stocks and Seanergy’s ticker was “SHIP,” even though he didn’t know anything about the company. Around $170 million worth of Seanergy shares traded hands that day, well above the company’s market cap. A total of 629 million shares were traded, the highest number of any NASDAQ stock that day.
Seanergy’s share price shot up from 19 cents to 37 cents during the recent trading flurry, an increase of 95%, and fell 39% Friday, closing at 17 cents, below where it started its run.....MUCH MORE
Penny-stock equity raises
Larger U.S.-listed owners have sold almost no equity capital this year, because shares are trading well below NAV (net asset value, the market-adjusted value of fleets, plus cash, minus debt and other liabilities). Selling equity at a steep discount to NAV dilutes existing shareholders.
Most of the 2020 deals have been done by Greek penny-stock shipowners selling to small institutional funds. Seanergy raised $30.1 million in a series of sales of shares and warrants between April 1 and May 7. Tsantanis confirmed that virtually all of the warrants have already been exercised to purchase common shares....
*See for example "Shipping: There Are Scams, Mega-Scams and DryShips (DRYS)":
These guys are doing stuff that would have gotten someone killed not that long ago....
Or:
Shipping: "DryShips Believes Class Action Lawsuit Is Without Merit" Says Neener-Neener, Declares 1:7 Reverse Split (DRYS)
How about:
Shipping: More On the Scam That Is Dryships AND a Tiny Treasure From The Past (DRYS)
Maybe:
Shipping: The SEC Would Like Some Information From DryShips (DRYS)
Who can forget:
More Troubles For DryShips Economou (DRYS)
Sure he's got securities attorneys chasing him on DryShips and sure he's got creditors trying to nail down the location of Ocean Rig's drillships but this could be a problem.
From the New York Post:
Billionaire’s ex-gal pal claims she was cheated out of $240M
A filmmaker who says she was “instrumental” in turning her ex into a billionaire shipping magnate claims he cheated her out of a $240 million settlement.
Or This:
Equity Conundrums: Who Buys DryShips? (DRYS)
I may have suffered a mini-stroke or a TIA or something.
Lets run through the F.A.S.T. checklist:
Face drooping: No, more of a laughter rictus.I was not expecting the answer to the headline question to be this pithy.
Arm weakness: maybe-I have fallen on the floor and seem to be losing control of some bodily functions.
Speech difficulties: can't talk, actually, can't breathe.
Time: to call for help
From FT Alphaville:
Oh, did I mention the reverse splits?Who buys DRYS?
By: Paul Murphy
Mr. Murphy at FT Alphaville did the heavy lifting on the computations:
The peak there, end-October 2007, is at $1.483 billion per share. At pixel on Thursday the stock stood at $1.40....
Again, just to emphasize, that is not market cap, That is share price giving effect for a few bazillion-to-one in reverse splits.
Who buys DRYS?
See also Mr. Murphy's “Because Americans are the dumbest investors around, and there’s lots of liquidity in this market.” if interested.
The saga terminated with this from MarketWatch, August 19, 2019:
Shares of DryShips Inc. drys soared 35% in premarket trading Monday, after the cargo ship operator announced a deal in which SPII Holdings Inc. will buy the shares it doesn't already own for $5.25 a share in cash. The purchase price is 37% above Friday's closing price of $3.83 and implies a market capitalization of $456.2 million. SPII Holdings is controlled by DryShips' Chairman and Chief Executive George Economou....
