Well duh. If the carriers are going to pull a Dryships and reverse split themselves into private companies* eventually the market decides this isn't any fun and moves on to SPACs.
A deep dive from FreightWaves, December 1:
Median market cap of shipping stocks down to a mere $209 million
The news is brimming with stories on businesses that are “dead men walking.” Movie theaters. Cruise lines. Retail outlets. Event organizers. Big-city offices. Ocean shipping doesn’t fall in this category — there’s no existential threat to transporting cargo by sea. Yet the travails of 2020 raise the question: Do shipowners still have a long-term future on Wall Street?
Looking to 2021 and beyond, can U.S.-listed shipping stocks recover or will they sink further toward penny-stock oblivion?
To answer that question, FreightWaves interviewed Jefferies shipping analyst Randy Giveans, Marine Money President Matt McCleery and Deutsche Bank transportation analyst Amit Mehrotra.
All three are optimistic that there is indeed a way forward.
“When people start to ask this kind of question, you know you’re closer to that point where you get back. It’s a darkest-before-the-dawn kind of thing,” asserted Mehrotra. “I mean, it wasn’t that long ago when my phone was ringing off the hook about tanker stocks.”
Shipping’s shrinking market cap
Shipowners only came to Wall Street in earnest starting in the mid-2000s. There have been depressed years since then — particularly 2009 — but 2020 feels worse sentiment-wise than any other.
FreightWaves analyzed daily market-capitalization data from Koyfin of 50 NYSE and NASDAQ-listed shipping equities. (Shipowners that are part of conglomerates with nonshipping entities were excluded, as were offshore service providers and American Depositary Receipts.)
The data shows that the market cap of the entire universe of U.S.-listed shipowners fell from $29.9 billion at the beginning of this year to $19.8 billion as of last Friday. That’s a year-to-date decline of 34% from an already very low base. The market cap of Amazon (NASDAQ: AMZN) is now 80 times that of all U.S.-listed shipowners combined.
(Chart: FreightWaves based on data from Koyfin)
The median market cap of U.S.-listed shipping stocks has fallen deep into micro-cap territory: from $420 million on Jan. 2 to a mere $209 million.
By sector, the aggregate market cap of tanker stocks — by far the largest segment in terms of valuation — is down 44% year-to-date. Market caps of mixed-fleet owners are down 51%, liquefied natural gas (LNG) carriers 45%, liquefied petroleum gas (LPG) carriers 35% and dry bulk owners 15%.
Bucking the trend, the market cap of container-ship owners is up 19% year-to-date. The main driver is Matson (NYSE: MATX). Matson is the sole U.S.-listed container-shipping company that is a liner operator, not a ship lessor.
Matson’s market cap is up 47% year-to-date. It is now more than 50% higher than the market cap of the second-largest pure public shipowner, tanker owner Euronav (NYSE: EURN). Among U.S.-listed shipping stocks, Matson is the biggest winner of 2020 by a very wide margin....
....MUCH MORE
*Some of our posts on Dryships
Shipping: There Are Scams, Mega-Scams and DryShips (DRYS)
These guys are doing stuff that would have gotten someone killed not that long ago. Shipping: More On the Scam That Is Dryships AND a Tiny Treasure From The Past (DRYS)
I was thinking about the SEC's Regulation S and how it might apply to the DRYS scam and maybe doing a post on same, not so much because I want to do the legwork for some hotshot young securities attorney but because I'd get to use phrases like "Safe Harbor provisions" and "Offshore" stock offerings and calling the penny stock hucksters "Pirates" and how clever that would be in relation to a shipping company and oh, the fun we would have.
And then I realized why these bon mots were gurgling out of the subconscious:
SEC Chairman Levitt had said that reg. S was "one safe harbor with too many pirates in it."
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:
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....And July 2020
Phi Scamma Jamma: "A lost decade for shipping stocks"
When you have assets that can move around the world and domiciles that offer weak to nonexistant shareholder protections you are just looking for new and exciting ways to lose money.
You know how Dryships ended up,* right?....
