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I agree with your persective, My post was to just put things in perspective. Sure with the FDA approval this could hit much higher in next few days. BuT just wanted peeps to be realistic and aware of the risks. I will also put some money here, just in case
Consolidating and moving up..........
Chart looking perfect for a major run.................
2 c comimg soon........
GNTA making a big move
Look at L2. Massive Selling. ML selling shares on the behalf of DRYS to generate 500M cash. Existings hareholders being diluted. Thsi agreement dose not signify anything but approval of more dilution.......
It is worth buying under $ 2.00 . It will fall again once the effect of news is gone.
I know. But actually they are selling more shares. It will go down by the end of the day
That is why I say current price is already accounted for the revenues. With o book value if it doe snot get approved, you loose 80 c , if approves you get 20 c.
Selling in Progress. Will close lower than open.
Will die by the end of th day ? may be close low again . Selling in progress
Merril Lynch selling 100 M shares of DRYS. Will fall below $ 2.00. No recovery anytime soon.
ML selling 100 M shares. No recovery here anytime soon. Will cetainly fally below $ 2.00. Mark my words.
CTNO going for the big run. May see 10c today or tommorrow.
CTNO going for the big run. May see 10c today or tommorrow.
DRYS will go down to less than $ 2.00 in a day or two. More bad News
Could Retain $650M Debt Liability In Spin-Off Co -FT
Feb 1, 2009 21:32:01 (ET)
DOW JONES NEWSWIRES
DryShips Inc. (DRYS), a New York-listed shipowner already facing a heavy debt burden, is likely to retain liability for a $650 million debt accumulated to build an offshore oil-drilling business it now wants to spin off, the Financial Times reported Monday, citing the company.
The company is also in breach of the conditions on nearly half its $3 billion borrowings and can't guarantee it will be able to reach agreement with its creditor banks about changing the conditions, it has declared in filings with the U.S. Securities and Exchange Commission, the FT said on its Web site.
The SEC filing outlines DryShips' desire to spin off to its shareholders Primelead Shareholders, a subsidiary that owns offshore drilling interests including Ocean Rig ASA, an Oslo-listed company taken over in April, the FT reported.
If the spin-off were to go ahead, the company would ask its banks to release it from guaranteeing Primelead's remaining debt, the FT reported the company as saying. Without the lenders' agreement, however, DryShips will retain liability for the debt without gaining from Primelead's future income, the FT said.
Full story: http://www.ft.com/cms/s/0/a69c5afa-f0bf-11dd-972c-0000779fd2ac.html.
DOW JONES NEWSWIRES
DryShips Inc. (DRYS), a New York-listed shipowner already facing a heavy debt burden, is likely to retain liability for a $650 million debt accumulated to build an offshore oil-drilling business it now wants to spin off, the Financial Times reported Monday, citing the company.
The company is also in breach of the conditions on nearly half its $3 billion borrowings and can't guarantee it will be able to reach agreement with its creditor banks about changing the conditions, it has declared in filings with the U.S. Securities and Exchange Commission, the FT said on its Web site.
The SEC filing outlines DryShips' desire to spin off to its shareholders Primelead Shareholders, a subsidiary that owns offshore drilling interests including Ocean Rig ASA, an Oslo-listed company taken over in April, the FT reported.
If the spin-off were to go ahead, the company would ask its banks to release it from guaranteeing Primelead's remaining debt, the FT reported the company as saying. Without the lenders' agreement, however, DryShips will retain liability for the debt without gaining from Primelead's future income, the FT said.
Full story: http://www.ft.com/cms/s/0/a69c5afa-f0bf-11dd-972c-0000779fd2ac.html.
MORE BAD NEWS ON DRYS
Could Retain $650M Debt Liability In Spin-Off Co -FT
Feb 1, 2009 21:32:01 (ET)
DOW JONES NEWSWIRES
DryShips Inc. (DRYS), a New York-listed shipowner already facing a heavy debt burden, is likely to retain liability for a $650 million debt accumulated to build an offshore oil-drilling business it now wants to spin off, the Financial Times reported Monday, citing the company.
The company is also in breach of the conditions on nearly half its $3 billion borrowings and can't guarantee it will be able to reach agreement with its creditor banks about changing the conditions, it has declared in filings with the U.S. Securities and Exchange Commission, the FT said on its Web site.
The SEC filing outlines DryShips' desire to spin off to its shareholders Primelead Shareholders, a subsidiary that owns offshore drilling interests including Ocean Rig ASA, an Oslo-listed company taken over in April, the FT reported.
If the spin-off were to go ahead, the company would ask its banks to release it from guaranteeing Primelead's remaining debt, the FT reported the company as saying. Without the lenders' agreement, however, DryShips will retain liability for the debt without gaining from Primelead's future income, the FT said.
Full story: http://www.ft.com/cms/s/0/a69c5afa-f0bf-11dd-972c-0000779fd2ac.html.
DOW JONES NEWSWIRES
DryShips Inc. (DRYS), a New York-listed shipowner already facing a heavy debt burden, is likely to retain liability for a $650 million debt accumulated to build an offshore oil-drilling business it now wants to spin off, the Financial Times reported Monday, citing the company.
The company is also in breach of the conditions on nearly half its $3 billion borrowings and can't guarantee it will be able to reach agreement with its creditor banks about changing the conditions, it has declared in filings with the U.S. Securities and Exchange Commission, the FT said on its Web site.
The SEC filing outlines DryShips' desire to spin off to its shareholders Primelead Shareholders, a subsidiary that owns offshore drilling interests including Ocean Rig ASA, an Oslo-listed company taken over in April, the FT reported.
If the spin-off were to go ahead, the company would ask its banks to release it from guaranteeing Primelead's remaining debt, the FT reported the company as saying. Without the lenders' agreement, however, DryShips will retain liability for the debt without gaining from Primelead's future income, the FT said.
Full story: http://www.ft.com/cms/s/0/a69c5afa-f0bf-11dd-972c-0000779fd2ac.html.
DRYS closing below 5. Death spiral From here
From your name it seems like you have chinese descendants.Why are you fighting White man's war against Black man ? Go for the Yellow man. LOL
Just kidding............
This would mean that at current price they will have to sell at least 100 M more shares to make $ 500,000,000.
Value of shares after dilution using Friday's share price as basis for calculation :
Value of Share price after Dilution = Friday's share price * present outstanding / Total outstanding after dilution
= 6.30 * 43,000,000 /143,000,000 = 1.89
Plus breach of covenant with existing shareholders. In short you have to pay them additional shares so they keep their mouth shut, means more dilution. Means DRYS shares are almost worthless after this dilution for along time till business picks up
CUSIP No. Y2109Q101
The purpose of this Amendment No. 3 to Schedule 13D is to report the entry into
a lock up agreement by Mr. George Economou with Merrill Lynch & Co. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), dated January 27,
2009, in connection with the ATM Equity OfferingSM Sales Agreement (the "Sales
Agreement") by and between DryShips Inc. (the "Issuer") and Merrill Lynch
relating to the offer and sale of up to $500,000,000 of common shares, par value
$0.01 per share, of the Issuer from time to time through Merrill Lynch as sales
agent.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------------------------------------------------------------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 3)
DryShips Inc.
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01
--------------------------------------------------------------------------------
(Title of Class of Securities)
Y2109Q101
--------------------------------------------------------------------------------
(CUSIP Number)
George Economou
80 Kifissias Avenue
Amaroussion 15125
Athens, Greece
011 30-210-8090570
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 27, 2009
--------------------------------------------------------------------------------
(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ].
--------------------------------------------------------------------------------
CUSIP No. Y2109Q101
---------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
George Economou
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC, BK, OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Greece
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
13,163,089*
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
13,163,089*
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON*
13,163,089*
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
18.7%
14. TYPE OF REPORTING PERSON
IN
--------------
* Mr. Economou may be deemed to beneficially own 10,944,910 of these shares
through Elios Investments Inc., which is a wholly-owned subsidiary of the
Entrepreneurial Spirit Foundation, a Lichtenstein foundation, the beneficiaries
of which are Mr. Economou and members of his family. Mr. Economou may be deemed
to beneficially own 1,000,000 of these shares through Fabiana Services S.A., a
Marshall Islands corporation, of which Mr. Economou is the controlling person.
Mr. Economou may be deemed to beneficially own 963,667 of these shares through
Sphinx Investment Corp., a Marshall Islands corporation, of which Mr. Economou
is the controlling person. Mr. Economou may be deemed to beneficially own
254,512 of these shares through Goodwill Shipping Company Limited, a Malta
corporation, of which Mr. Economou is the controlling person.
--------------------------------------------------------------------------------
CUSIP No. Y2109Q101
---------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Elios Investments Inc.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of the Marshall Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
10,944,910
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
10,944,910
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON*
10,944,910
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
15.5%
14. TYPE OF REPORTING PERSON
CO
--------------------------------------------------------------------------------
CUSIP No. Y2109Q101
---------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Fabiana Services S.A.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of the Marshall Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
1,000,000
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
1,000,000
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON*
1,000,000
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
1.4%
14. TYPE OF REPORTING PERSON
CO
--------------------------------------------------------------------------------
CUSIP No. Y2109Q101
---------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Sphinx Investment Corp.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of the Marshall Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
963,667
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
963,667
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON*
963,667
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
1.4%
14. TYPE OF REPORTING PERSON
CO
--------------------------------------------------------------------------------
CUSIP No. Y2109Q101
---------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Goodwill Shipping Company Limited
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Malta
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
254,512
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
254,512
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON*
254,512
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
0.4%
14. TYPE OF REPORTING PERSON
CO
--------------------------------------------------------------------------------
CUSIP No. Y2109Q101
The purpose of this Amendment No. 3 to Schedule 13D is to report the entry into
a lock up agreement by Mr. George Economou with Merrill Lynch & Co. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), dated January 27,
2009, in connection with the ATM Equity OfferingSM Sales Agreement (the "Sales
Agreement") by and between DryShips Inc. (the "Issuer") and Merrill Lynch
relating to the offer and sale of up to $500,000,000 of common shares, par value
$0.01 per share, of the Issuer from time to time through Merrill Lynch as sales
agent.
--------------------------------------------------------------------------------
Item 1. Security and Issuer.
NO MATERIAL CHANGE FROM THE SCHEDULE 13D/A FILED ON November 18, 2008.
--------------------------------------------------------------------------------
Item 2. Identity and Background.
NO MATERIAL CHANGE FROM THE SCHEDULE 13D/A FILED ON November 18, 2008.
--------------------------------------------------------------------------------
Item 3. Source and Amount of Funds or Other Consideration.
NO MATERIAL CHANGE FROM THE SCHEDULE 13D/A FILED ON November 18, 2008.
--------------------------------------------------------------------------------
Item 4. Purpose of Transaction.
NO MATERIAL CHANGE FROM THE SCHEDULE 13D/A FILED ON November 18, 2008.
--------------------------------------------------------------------------------
Item 5. Interest in Securities of the Issuer.
NO MATERIAL CHANGE FROM THE SCHEDULE 13D/A FILED ON November 18, 2008.
--------------------------------------------------------------------------------
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
On January 27, 2009, Mr. George Economou entered into a lock up agreement with
Merrill Lynch in connection with the ATM Equity OfferingSM Sales Agreement by
and between the Issuer and Merrill Lynch relating to the offer and sale of up to
$500,000,000 of common shares, par value $0.01 per share, of the Issuer from
time to time through Merrill Lynch as sales agent. The lock up agreement expires
60 days from the date of the Sales Agreement.
--------------------------------------------------------------------------------
Item 7. Material to be Filed as Exhibits.
Exhibit A: Agreement between the Reporting Persons to file jointly
Exhibit B: Schedule of Transactions in the Shares.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
January 29, 2009
(Date)
ELIOS INVESTMENTS INC.
BY: /s/ Dr. Renato Cefai
----------------------
Name: Dr. Renato Cefai
Title: Sole Director
/s/ George Economou
------------------------
George Economou
FABIANA SERVICES S.A.*
BY: /s/ Andri Papadopoulou
-------------------------------
Name: Andri Papadopoulou
Title: Sole Director
GOODWILL SHIPPING COMPANY LIMITED*
BY: MARE SERVICES LTD.
BY: /s/ Adriano Cefai
-------------------------------
Name: Adriano Cefai
Title: Director
SPHINX INVESTMENT CORP.*
BY: MARE SERVICES LTD.
BY: /s/ Adriano Cefai
-------------------------------
Name: Adriano Cefai
Title: Director
* The Reporting Persons disclaim beneficial ownership except to the extent of their pecuniary interest therein.
--------------------------------------------------------------------------------
Exhibit A
AGREEMENT
The undersigned agree that this Schedule 13D dated January 29, 2009 relating to the common stock of DryShips Inc. shall be filed on behalf of the undersigned.
ELIOS INVESTMENTS INC.
BY: /s/ Dr. Renato Cefai
----------------------
Name: Dr. Renato Cefai
Title: Sole Director
/s/ George Economou
------------------------
George Economou
FABIANA SERVICES S.A.*
BY: /s/ Andri Papadopoulou
-------------------------------
Name: Andri Papadopoulou
Title: Sole Director
GOODWILL SHIPPING COMPANY LIMITED*
BY: MARE SERVICES LTD.
BY: /s/ Adriano Cefai
-------------------------------
Name: Adriano Cefai
Title: Director
SPHINX INVESTMENT CORP.*
BY: MARE SERVICES LTD.
BY: /s/ Adriano Cefai
-------------------------------
Name: Adriano Cefai
Title: Director
January 29, 2009
--------------------------------------------------------------------------------
Exhibit B Transactions in the Shares
Number of Shares Date of Transaction Purchase/(SOLD) Price of Shares
N/A
SK 23113 0002 959547
You are not aware of some discussions that are going on. Backstopping some of the Assets would put them in a sound financial situation with additional cash being generated. Talks are aso going on about paying off sunstantial part of the loan. You will see the effect in stock price in the next week.
I complete agree and the CEO is one of the biggest scammer. Previous shipping company went BK while he trasnferred the cash to his private firm. Doing it again.Cramer and other played it for the first run and made it good when it hit $ 17. Now everyone is getting out as the dilution is made of public knowledge through a filing.
DRYS CEO screwed the debtors and public shareholders. ALL scamy CEO's needs to be hanged by their BALLS
AIG in Talks for U.S. to Backstop Assets
WSJ Article BUSINESS JANUARY 31, 2009
Comments
more in Business »
American International Group Inc. is in discussions with the government about Washington backstopping some of its troubled assets and is considering selling units through initial public offerings.
"We're looking at a broader array of recapitalization options," said Paula Reynolds, an AIG vice chairman who is overseeing the restructuring of AIG, which was rescued by the government in September with a bailout package that now totals $150 billion.
"We both realize that the environment's changing and we have to adjust to that environment," Ms. Reynolds said in an interview, referring to the federal government. She joined the company after the bailout ...
Please be aware that the stock may take heavy pounding on Monday and possibliy to a lesser extent on Tuesday Before going up . I am saying this based on the technicals and chart. Don't get shaken off in my opinion. There might be some nice shaking..............
NEW 13 D filing + new deal with Government coming. AIG shares ready to make a big run............
Next leg this will move to 3 -4c. More freely trading shares here compared to ACTC. Hence the process might be slightly slow here. But we will defenitely touch 10 c in few weeks.
Nope . He did not tell me that . He however did tell me that the management is spending a lot of dollars and he intends to make it profitable. But I personally think that he has other motives for buying so many shares knowing that he has privately held oil company.
John might be planning a reverse merger with his oil company
Mr Browning has been buying share for more than 2 years. I have talked to the gentleman. He owns an Oil company in Texas. Nice man.
Thanks for the clarification of how they breached the Covenant. I should have done my research better. I was totally caught unaware of the massive dilution they are doing with the help of Merril Lynch.
In order to satisfy the old debtors they will have to either pay them off or do more dilution to keep them quiet. I think there is less of BK risk with cash flow through sale of shares, but dilution will mean that shares will be worth almost nothing.
I still see potential risk of BK due to the value of the fleet eroding in the market causing them to affect their credit rating forcing them to BK or going private.
Either way things are looking real Bad.
Time To Man The Lifeboats On Dryships (DRYS, GNK, EGLE)
Indications that things weren't quite shipshape at bulk commodity carrier Dryships (Nasdaq:DRYS) surfaced last week when the company stunned the market with news that it was suspending its dividend and canceling several new ship orders. It also warned that its fourth-quarter earnings would fall well short of expectations.
Now another shoe appears to have dropped.
Dryships Faces Debt Crisis
The company's shares shed as much as 30% of their value after management disclosed that it was now in breach of certain financial covenants, and it planned to raise $500 million from an unexpected new stock issue. Apparently two of the company's bankers, which are collectively owed about $752 million, recently gave notice that the loans were in breach. Nervousness on the part of lenders is understandable. During the last shipping boom in the mid-1990s, many Greek-owned shipping companies issued junk bonds to finance fleet expansion. The whole thing turned out very badly for investors as 17 out of the 18 Greek issuers defaulted.
IN PICTURES: Learn To Invest In 10 Steps.
One analyst covering the stock quickly moved to downgrade his recommendation on the company to "underperform" - that's analyst-speak for "sell". (For more on analyst expectations, be sure to read Analyst Recommendations: Do Sell Ratings Exist?)
Rapid Industry Growth Fueled Debt
Dryships' problems come at what appears to be the end of a dramatic global shipping boom over the last five years. During this time, more than 20 Greek-controlled ocean-going shipping companies came to market raising billions to finance fleet expansion, with most of that in the form of debt. Looking at Dryships' latest balance sheet, its debt ratio stood at 56%. A comparable degree of leverage is evident on the balance sheets of other dry carriers like Eagle Bulk Shipping (Nasdaq:EGLE) and Genco Shipping (NYSE:GNK).
Signs that the industry had hit rough water were also apparent from the recent cancellation of a major ship purchase order by Genco and the suspension of dividend payments by Eagle and Diana Shipping (NYSE:DSX). (Read Is Your Dividend At Risk? to learn about some telling factors that can help you answer this question and avoid losses.)
Corporate Governance Issues Also A Concern
The move to go public was unprecedented in that it also marked a major management paradym shift for those companies, which until that point had been closed family businesses. This apparently has not been without its problems.
In a somewhat prophetic piece published last June, the Financial Times of London gave a public airing to the fact that serious corporate governance issues still remained in the industry. Quoting various sources, the article noted that management in the industry remained highly centralized and somewhat unaccountable, that many boards consisted of relatives and other people closely associated with the owner's family, and that the potential still existed for owner-managers to place their private interests ahead of those of company shareholders. This can lead to potential conflicts of interest in cases where owner-managers use their private companies to provide management services or even sell ships to the listed entity.
The Final Word
The loss of dividend income, imminent risk of total default, the prospect of serious equity dilution, falling shipping rates and lingering corporate governance concerns all spell out perfect storm conditions for any remaining shareholders still willing to ride out the rough weather in hopes of an industry turnaround. Frankly, it looks like it's time to abandon ship.
By Eugene Bukoveczky
Eugene Bukoveczky is a freelance writer and investment researcher. He holds a CFA designation and has spent several decades working in the investment business in places like Toronto, New York, London and Dubai. He currently resides in Nova Scotia, where, when not writing, he devotes his time to chopping wood, growing his own vegetables, riding his bike to the store, and thinking about other ways to reduce his carbon footprint. At the time of writing Eugene Bukoveczky did not own shares in any of the companies mentioned in this article.
Cbai taking a small breather before the next leg.
As the Values of Their Vessels Sink, Shippers Become Anchored by Debt
Investors Mutiny as DryShips Plans Another Stock Issue
They may not be able to pay the two of their debtors as they already breached the covenant. Alsp problems with cash flow
Yep. Close below $ 5.00 today. Sure shot BK. Terms are known to many. no chance of recovery in IMO.
DRYSHIPS(DRYS) IS A SINKING SHIP. BIG HOLE FOUND.LOL
Falling below 7.00. Not looking good
Rumors of BK hence the free fall.
Gravitational force acting on DRYS. LOL. Free fall