Dry Ships Inc. (Nasdaq:DRYS) Don’t Try This at Home Kids

Dry Ships Inc. (Nasdaq:DRYS)

[This is an updated version of a report we published on February 1, 2017]

Dry Ships Inc. (Nasdaq:DRYS) has it all – an intriguing Chairman, thrilling price and volume action, and industry commentary that would generously be classified as cautious. The company trades on the Nasdaq under the ticker DRYS and has been dominating trader chat rooms for several months. To add to the intrigue, rumors persist that Kalani no longer owns any of the shares it received in the January transaction and Economou, Chairman of Dry Ships Inc. (Nasdaq:DRYS), has used a financing scheme that enriches himself without risking any of his own funds.

An investor that purchased DRYS shares five years ago, Feb. 1, 2012, would have seen their investment, adjusting for reverse splits and dilution, lose 99.9876% of its value. So how could such a company survive not only de-listing but also investor confidence? The de-listing question is readily answered by multiple reverse stock splits and increased borrowing that some people claim serves no purpose other than to keep a failed company afloat. The company is 99.8% below its 52-week high and, according to its latest quarterly report, is burning cash at twice the rate of the previous quarter. Lastly, reported 2016 revenues were about 5.3% of their 2015 levels. To be fair – Dry Ships Inc. (Nasdaq:DRYS) sold off a lot of assets to reduce/restructure their debt load. But the story around Dry Ships Inc. (Nasdaq:DRYS) and its chairman is intriguing.

On December 1 of 2016 George Economou purchased most of Dry Ships Inc. (Nasdaq:DRYS) bank debt. Eleven days later, Dry Ships announced the successful completion of a $100 million equity raise in exchange for convertible preferred shares and warrants. On December 15, Dry Ships received an increase in their credit line from Economou to $200 million after the company repaid over $30 million. At the same time Economou lowered his firm’s management fees in return for 30% of all future realized asset value increases. To continue to add to the complexity, all within less than a month, Dry Ships Inc. (Nasdaq:DRYS) entered into a financing agreement with mysterious Kalani Investments for another $200 million in an equity placement. So, what did Dry Ships do with their funding? They bought ships from a company reportedly controlled by George Economou – Chairman of Dry Ships. And in the middle of all of this, DRYS outstanding shares grew from approximately 1.1 million to over 107.9 million in less than two months. On February 17, 2017 the company released news (and interestingly made specific mention that Kalani and Dry Ships have no affiliation) of a further $200 million Kalani investment in return for shares of DRYS common stock that could take place over the next two years.

Throughout all of this, Dry Ships has been extensively commented on in financial media. Some of the article headlines include the titles “DryShips Stock: The Worst Dollar You’ll Ever Spend” and “George Economou Is The Main Reason To Sell Dryships” – both on SeekingAlpha.com. The MotleyFool.com published an article with the headline “Why DryShips’ Shares Vacillate So Much and How It’s CEO is Hanging Investors Out to Dry”. To be fair, articles on more populist financial media websites are purported to be no less damning if one can read between the lines like a professional trader.

Still, DRYS stock has been the big topic in trader chat rooms. The increased volume and attention have led to massive liquidity that few, if any, stocks of DRYS capitalization enjoy. Since Mr. Economou’s entrance, DRYS has averaged over 13.5 million shares traded daily. In September and October of 2017, prior to Mr. Economou’s entrance, less than 8,000 shares traded hands on average. The ending to this story has yet to be written. Mr Economou may come off as a genius that schooled the more conventional observers of his actions and scoffed. Or the last one out of the DRYS stock pool may be left with nothing more than the thrill of a ride that few have seen before.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

Globus Maritime (Nasdaq: GLBS) Shareholders Having a Wild Ride

Globus Maritime Limited – Nasdaq: GLBS

Since early 2016, Globus Maritime has been on quite a ride. 2016 saw the shares, traded on the Nasdaq under ticker GLBS, trading below $1. This week GLBS traded as high as $9.69. During that time, GLBS experienced double and triple percentage moves on a regular basis.

In late November, Globus Maritime announced a private placement that would bring in proceeds of $5 million and GLBS shares rose favorably. Two weeks later, Globus announced earnings that sent GLBS shares even higher. Then Globus provided guidance that the private placement would be delayed. After Globus announced the planned private placement would not occur, shares dropped 20%+ in pre-market trading.

Globus Maritime is an integrated dry bulk shipping company that provides marine transportation services worldwide and presently owns, operates and manages a fleet of dry bulk vessels that transport iron ore, coal, grain, steel products, cement, alumina and other dry bulk cargoes internationally. Globus’ subsidiaries own and operate five vessels with a total carrying capacity of 300,571 DWT and a weighted average age of 8.8 years as of December 31, 2016.

Globus has seen increasing lower sales since 2011 when the company posted sales of $35.6 million and in 2015 sales were just $12.7 million. GLBS EPS was positive in 2014 with $1.14 posted. However, in 2015 there was an EPS loss for GLBS shareholders of $12.80.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

2/1/2017
Ticker Symbol GLBS
Last Price a/o 2:20 PM EST  $                      7.91
Average Volume                1,210,000
Market Cap (mlns)  $                    21.81
Sales (mlns) $9.70
Shares Outstanding (mlns) 2.6
Share Float (mlns) 2.37
Shortable No
Optionable No
Inside Ownership 0.00%
Short Float 4.74%
Short Interest Ratio 0.09
Quarterly Return 358.47%
YTD Return 105.64%
Year Return 2230.56%

The Drama That is Dry Ships Inc. (Nasdaq: DRYS)

Dry Ships Inc. – Nasdaq: DRYS

Dry Ships Inc. has it all – an intriguing Chairman, thrilling price and volume action, and industry commentary that would generously be considered as cautious. The company trades on the Nasdaq under the ticker DRYS and is dominating trader chat rooms. The catalyst to the latest increase in trading volume is related to news that Dry Ships raised $200 million in an equity sale to Kalani Investments – a BVI-based firm with little transparency. To add to the intrigue, rumors persist that Kalani no longer owns any of the shares it received in the transaction and George Economou, Chairman of Dry Ships Inc., has used a financing scheme that enriches himself without risking any of his own funds.

An investor that purchased DRY shares five years ago, Feb. 1, 2012, would have seen their investment, adjusting for reverse splits and dilution, lose 99.9876% of its value. So how could such a company survive not only de-listing but also investor confidence? The de-listing question is readily answered by multiple reverse stock splits and increased borrowing that some people claim serves no purpose other than to keep a failed company afloat.

On December 1, of 2016 George Economou purchased most of Dry Ships bank debt. Eleven days later, Dry Ships announced the successful completion of a $100 million equity raise in exchange for convertible preferred shares and warrants. On December 15, Dry Ships received an increase in their credit line from Economou to $200 million after the company repaid over $30 million. At the same time Economou lowered his firm’s management fees in return for 30% of all future realized asset value increases. To continue to add to the complexity, all within less than a month, Dry Ships entered into a financing agreement with mysterious Kalani Investments for another $200 million in an equity placement. So, what did Dry Ships do with their funding? They bought ships from a company reportedly controlled by George Economou – Chairman of Dry Ships. Then the unconfirmed whispers started that Kalani had sold all their shares to the public, at a small profit, and now hold no equity in DRYS. And in the middle of all of this, DRYS outstanding shares grew from approximately 1.1 million to over 107.9 million in less than two months then went through an 8:1 reverse split. Some people claim that Economou’s financing scheme basically used shareholder funds to buy ships from a company he controls with equity funding from a debt-laden and financially unsustainable company he also controls (Dry Ships Inc.).

Throughout all of this, Dry Ships activity was extensively commented on in the financial media. Some of the article headlines included “DryShips Stock: The Worst Dollar You’ll Ever Spend” and “George Economou Is The Main Reason To Sell Dryships” – both on SeekingAlpha.com. The MotleyFool.com published an article with the headline “Why DryShips’ Shares Vacillate So Much and How It’s CEO is Hanging Investors Out to Dry”. To be fair, articles on more populist financial media websites are purported to be no less damning if one can read between the lines like a professional trader.

Still, DRYS stock has been the big topic in trader chat rooms. The increased volume and attention have led to massive liquidity that few, if any, stocks of DRYS capitalization enjoy. The ending to this story has yet to be written. Mr Economou may come off as a genius that schooled the more conventional observers of his actions and scoffed. Or the last one out of the DRYS stock pool may be left with nothing more than the thrill of a ride that few have seen before.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

Global Ocean Group (Nasdaq: GOGL) Shares Continue Climb

Golden Ocean Group Ltd. – Nasdaq: GOGL

Golden Ocean Group Ltd. has been up over 7% on large volumes. Traded on the Nasdaq under ticker symbol GOGL, shares reached $6.00 on double the daily average volume. Investors may be reacting to continued upgrades announced by Global Ocean Group in their financial guidance.

Golden Ocean Group Ltd. (GOGL) is an international dry bulk shipping company based in Bermuda, mainly operating in the Capesize, Panamax, and Supramax segments. GOGL is listed on Nasdaq and the Oslo Stock Exchange. Global Ocean Group owns and controls a fleet of 70 vessels chartered in on long term time charter contracts.

Golden Ocean Group sales have increased year-on-year since 2012 when it reported sales at $37.5 million – in 2015 reported sales were $190.2 million. GOGL shares have not been as impressive. EPS for GOGL was $1.20 in 2012 but the company reported a loss of $7.30 for GOGL in 2015. Currently GOGL is trading above the analysts’ consensus price target of $4.25. Three firms follow Global Ocean Group and one rates GOGL as a “Strong Buy” while the other two rate GOGL shares as a “Sell”.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

DryShips Inc (Nasdaq: DRYS) Gets Debt Re-Financed

DryShips Inc. – Nasdaq: DRYS

Greece-based DryShips Inc. announced an agreement for $200 million in refinancing through Sifnos Shareholders Inc. Shares of DRYS have, so far, reached $5.10 from yesterday’s close of $3.55 on heavy volume – a 40%+ increase. DryShips owns 13 Panamax drybulk carriers, and 6 offshore supply vessels – comprising 2 platform supply and 4 oil spill recovery vessels.

According to a press release provided by DryShips Inc.:

Under the terms of the New Revolver, Sifnos will extend a new loan of up to $200.0 million secured by all of the Company’s present and future assets except the MV Raraka which will continue to be financed by its existing commercial lender. The new loan will carry an interest rate of Libor plus 5.5%, is non-amortizing, has a tenor of 3 years, has no financial covenants and will be arranged at a cost of 2.0%. In addition, Sifnos will have the ability to participate in realized asset value increases of the collateral base in a fixed percentage of 30%.

Interestingly, yesterday DRYS slipped to a 52-week low of $3.51. Also interesting is that no analyst has issued a rating on DRYS for over two years. Current trading volumes, however, are six times the daily average and trader forums for the shares are experiencing large activity. Sales had increased from $1.08 million in 2011 to $2.19 billion in 2014 but last year the figure dropped to $0.97 billion.

Always perform your own due diligence before making any decisions regarding the buy or sale of any stock. The below data is provided without any guarantee of its accuracy.

Ticker Symbol DRYS
Last Price a/o 3:35 EST $5.08
Average Volume 4.86 million
Market Cap $4.3 million
Sales $66.1 million
Shares Outstanding 1.21 million
Share Float 0.87 million
Shortable Yes
Optionable Yes
Inside Ownership 26.40%
Short Float 33.56%
Short Interest Ratio 0.06
Quarterly Return -51.70%
YTD Return -98.61%
Year Return -97.63%