Diana Containerships Inc (NASDAQ:DCIX)
Diana Containerships Inc (NASDAQ:DCIX) shares are up 81%, to $12, in pre-market trading after the shipping company reported a Q3 2017 loss of $8.7 million. On a per-share basis, the loss amounted to $128.67. DCIX shares, a favorite of day-traders, hit a low of $6.35 at 7:13 AM EST and a high of $9.50 at 7:56. Volume has been light to moderate.
The shipping company posted revenue of $6.7 million in the period. Greece-based Diana Containerships Inc (NASDAQ:DCIX) is a global shipping provider. The company’s containerships are employed primarily on time charters with leading liner companies carrying containerized cargo along worldwide shipping routes.
Diana Q3 Financials
Net income for the nine months ended September 30, 2017 amounted to $20.4 million, compared to a net loss of (-$140.6) million for the same period of 2016. The net income for the nine months ended September 30, 2017 reflected a gain from a debt write-off, arising from the settlement agreement with respect to the secured loan facility with the Royal Bank of Scotland plc. The specific gain, net of related expenses, amounted to $42.2 million.
The loss for the nine months ended September 30, 2016 reflected the result of impairment charges for seven of the company’s vessels. Time charter revenues, net of prepaid charter revenue amortization, for the nine months ended September 30, 2017, amounted to $16 million, compared to $27.7 million for the same period in 2016.
A number of law firms are pursuing class action lawsuits against Diana Containerships Inc (NASDAQ:DCIX). The complaints generally allege that the company made materially false and misleading statements regarding the company’s business, operational, and compliance policies.
Specifically, the company made false and/or misleading statements and/or failed to disclose that: (i) through his control of Diana, Symeon Palios caused Diana to sell its common shares and securities convertible into common shares to an entity named Kalani Investments Limited (“Kalani”) at a significant discount to market price and to file registration statements so that Kalani could resell these shares into the market; (ii) when Kalani’s sales of DCIX stock caused the price of Diana stock to drop, the company would reverse split the stock, causing a specific number of outstanding shares to be merged into a single share, thereby raising the price of Diana stock; (iii) then Diana would again sell securities to Kalani and the same pattern of transactions would ensue.
By October 3, 2017, as a result of defendants’ ongoing dilutive and manipulative conduct, the price of Diana common stock had declined to close at $0.47 per share on an unadjusted basis. At this share price, Diana had a market capitalization of less than one million dollars, despite having raised millions of dollars since January 2017.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.