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'ronnies', I'm almost positive that there will not be another RS. Say they sold all 41 mil @ $1.00. Then the share count will be 41+25=66 million OS. This is not out of hand to the current NAV of the company.
'TSmith4659', If you do a 4:1 RS on say a 60 million share count there will not be many shares left to purchase. If you reverse split this on a low share count the outstanding share count keeps getting smaller and smaller from the net asset value of the company.
If they would do one more RS this would really take a huge rise upward when this round of dilution is done, meaning the assets would be worth way more than the share price.
The share price will eventually catch up to the NAV when all this dilution is complete. You may also get a giant short squeeze to boot. All means a substantial rise in share price soon. I would not want to be short this puppy at the moment.
All this would change though if the company announces another round of toxic financing, in which I think will not happen. It was much harder and longer to get this round of toxic financing done. The company knows this also.
'TSmith4659', because the dilution will be slowly coming to an end soon. The company is taking it's sweet time to finish this round of dilution without tanking the share price below $1.00.
When the dilution is done there will not be a RS. Ending share count will be around 50 - 60 million. No need to RS.
Do not let these nervous shorts shake you out of your position. "BOOM" time coming soon here. Patience, patience, patience.
Ongoing DryShips Equity Raise Almost 80% Finished Now
Jul. 26, 2017 7:24 AM ET|95 comments| About: DryShips Inc. (DRYS)
Henrik Alex
Henrik Alex
Momentum, event-driven, short-term horizon, tech
(2,635 followers)
Summary
Company issues update on its ongoing equity raise; progress is approaching the 80% mark.
8th reverse split within 15 months just executed.
Expect traders and speculative investors starting to position in the stock as the offering moves closer to the finish line.
Projected net asset value after the close of the offering of between $4 and $7 per share.
Preparing to enter a long trade in the shares with timing being of utmost importance.
Note:
I have previously covered DryShips (NASDAQ:DRYS), so investors should view this article as an update to my earlier publishings on the company.
After the end of Tuesday's regular session, DryShips issued another update on the progress of its ongoing equity raise utilizing the infamous Kalani Investments scheme, which I have already discussed in detail in a series of articles on Seeking Alpha.
Remember, the company just executed its 8th reverse split within 15 months on Friday. For a detailed history of the previous reverse splits, look here.
To remain an equityholder in the company after all recent splits, it would have required you to own 11.76 million shares before the first reverse split on March 11, 2016. But even in this case, you would be down to a single share now. Every stockholder below that threshold has been wiped out entirely over the past 15 months.
Picture: Recently acquired Kamsarmax bulk carrier "Moritz Oldendorff." Source: MarineTraffic.com
Meanwhile, the company continues to cram equity into the market in order to successfully close its current $226.4 million equity purchase agreement with Kalani Investments. Once finished, DryShips will have raised more than $700 million in new equity since November 2016.
Over the past seven sessions, DryShips has sold another (split-adjusted) 14.08 million shares to Kalani, raising gross proceeds of $26.7 million. This brings the total amount raised under the current equity purchase agreement to $178.5 million, with $47.9 million still remaining. Current share count is roughly 19.2 million.
Since my last article "DryShips - Still Plenty Of Money To Be Made On The Short Side" has been published one month ago, the stock has lost another 92% in value - as expected. During this time, the company has raised roughly $60 million in equity and taken delivery of all of its recently purchased vessels, except for three remaining VLGCs, which are currently expected to be delivered in September, October and December 2017.
In conjunction with Friday's reverse split, DryShips updated investors on some key financial information:
Cash and cash equivalents of $58.6 million
Book value of vessels, including advances: $652.6 million
Debt outstanding balance: $237.5 million
Taking into account the $26.2 million raised since Friday and applying a 10% valuation discount to the fleet's stated book value, I estimate the current net asset value per share at approximately $22.60 with the company's stock currently trading at a whopping 94% discount.
While DryShips now looks fully funded to take delivery of the remaining VLGCs, there's little doubt that the company will utilize the entire $226.4 million equity purchase agreement with Kalani, so investors still have to prepare for substantially more dilution in the weeks ahead.
That said, I was finally stopped out of my short position on Friday's recovery rally and do not intend to re-enter a short bet in the company's shares at this time. With the ongoing equity offering now almost 80% done, I would expect traders and speculative institutional investors starting to position themselves ahead of the anticipated, at least temporary, halt to the company's recent slew of equity offerings.
With my expectation for meaningfully increased buying interest going forward, I am now projecting the offering to be finished by mid-August at the latest point and DryShips to potentially avoid another reverse stock split.
Under a best-case scenario, I still expect the company's share count to increase to roughly 70 million at the close of the offering for a net asset value of approximately $7 per share, with the shares currently trading at an 80% discount.
Under a more realistic scenario, the final share count might come in closer to 85 million for a net asset value of approximately $5.75 per share.
Under a worst-case scenario, I am modeling the final share count at 125 million, resulting in a net asset value of approximately $4.
Given these projections, I am currently planning to take a long position in the shares once the offering moves even closer to the finish line.
As evidenced by the preceding offering, traders and speculative investors tend to position themselves ahead of the expected closing date instead of waiting for the company's official announcement.
While definitely a very risky bet, I currently do not expect DryShips to follow through with another Kalani deal anytime soon given the diminishing investor demand experienced for this latest equity offering.
Moreover, for once in my life, I am inclined to believe in the statements recently made by the company's colorful CEO and Chairman George Economou, in conjunction with the recent credit facility announcement:
"We have come a long way since a year ago, when we were in discussions with commercial lenders about the restructuring of our debt.
We are pleased that we have put all this behind us and grateful for the support of ABN AMRO and KEXIM in arranging our first bank financing since 2014. Following the closing of the ABN/KEXIM loan, DryShips will still have the majority of its fleet (32 vessels) unencumbered.
In dollar terms, assuming a modest 50% leverage of the market value of these assets, this would imply the ability to raise approximately $250 million (or $19.13 per share) of additional debt capital. We will now concentrate our efforts on arranging financing for these vessels. This will allow us to focus on further accretive vessel acquisitions without the need to raise further equity."
Don't get me wrong, I have absolutely no illusions about Economou's course of action going forward. Once the share price will have recovered some of the giant gap to net asset value, he might very well choose to reactivate the Kalani vehicle and start all over again. Moreover, a major recovery rally will almost certainly attract new investors to the stock, vastly increasing the chances for successfully raising another large amount of equity within a short time.
So, my current game plan is to stay a small step ahead of the crowd and positioning in the shares with still $25 million or so left to be raised under the current offering. Of course, I do not plan on holding these shares for longer, I am just hoping for a decent bounce once the end of the ongoing share oversupply will come into sight.
Bottom line:
As the current offering is moving closer to the finish line, I do expect traders and speculative investors starting to pour into the stock rather sooner than later as even under a worst-case scenario, the projected net asset value per share is going to exceed today's share price by almost 200%.
Personally, I am hoping for DryShips/Kalani to aggressively continue selling shares into the market, potentially culminating in another reverse split. Once executed I would expect the stock to mirror last Friday's trading pattern so I would be looking to buy into expected initial weakness.
Investors should closely monitor the stock's performance and trading volume over the next couple of sessions as timing will be of utmost importance when entering this trade.
I will update investors on my plans regarding the intended DryShips long trade as the current equity offering moves closer to completion.
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in DRYS over the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
https://seekingalpha.com/article/4090564-ongoing-dryships-equity-raise-almost-80-percent-finished-now
'Blingsauces', no RS yet. If he RS's now there will not be enough outstanding shares left. The share count has to get over around 60 mil before it's feasable to do a a RS. MOHO though.
'Just a Speculator', you're welcome. I could have not explained what may happen with DRYS any better than the SA author did. I'm thinking he may be correct here.
I've been in and out of DRYS several times with a gain, but this time I'm currently down quite a bit at the moment. I do however believe that a substantial rise will happen soon.
I'm thinking late this week or early next week. One reason I purchased shares this week. I did buy about two days early though, but still think I will come out positive with this trade.
If you buy this be sure you do so with settled funds. I can't say when to buy, but IMHO I'm thinking it's getting close.
DryShips: Penguins At The Water's Edge
Jul. 26, 2017 4:20 PM ET|38 comments| About: DryShips Inc. (DRYS)
Summary
DryShips is nearing the end of its current dilution round.
Day traders anticipating the end of the dilution round might start buying.
Day traders timing a buy right could see a double or triple.
As most investors following DryShips (NASDAQ:DRYS) already know, CEO George Economou has been diluting the company's common shares through toxic financing since late last year, intent on filling DRYS's coffers without any regard for common shareholders. Over the past eight months, DryShips has pulled in over $700M from investors through four financing deals with a pseudo-underwriter named Kalani. In these financing deals, Kalani receives common shares of DryShips at a 6% discount to the lowest market price over any previous eight trading days. Kalani then dumps those shares onto the market. This practice has decimated shareholders while increasing the book value of the company. The high book value of the company continues to lure more investors.
The current Kalani financing was for $226.4M and as of the last update put out by DryShips, $47.9 of this financing remains. DryShips' book value will likely be around $500M after this final round ends while the current market cap sits around $20M.
What is important now is that investors are starting to anticipate the end of the current financing. The reason is that once the dilution ends, there's hope that there won't be another Kalani financing. And if there is another Kalani financing, there has historically been two weeks between the end of one financing round and the beginning of the next. When the current financing ends, the book value per share will likely end up somewhere between $5 and $8, very high compared to the current share price of $1.10. The exact final book value per share obviously depends on how fast the price drops per day compared to the dollar value of the dilution. It's at least highly probably that the book value per share will be a multiple of the share price when the current dilution ends.
That brings us to the "penguins on the water's edge" analogy. When penguins make their trek for their food, they all line up along the water's edge. Each penguin is reluctant to jump into to the water, infested by killer whales and sea lions, so they all wait on the water's edge for the other penguins to take the plunge. If they all jump in at one time, the predators can't eat them all at once so the penguins have a higher chance of eating their fill of fish and escaping alive with a full stomach.
With DryShips, the carnage has been ongoing but with the current dilution round nearing an end, the predator looks to be somewhat satisfied. If all investors jump in at once, they can hold the share price higher until the dilution ends, limiting the number of new shares issued at lower prices. That would leave a high book value per share in a much more stable environment-the fish would appear to be almost free for the taking while Mr. Economou is digesting. My use of the word, "fish" might be misleading as it describes a nutritious meal for penguins where investors who buy DryShips stock are probably better off regurgitating the shares after holding for a short period of time.
It's likely that penguins will all jump into the water relatively soon, probably within the next few days. Since $170M worth of DryShips shares were purchased by investors over the past few months without an eye toward waiting until the end of the dilution round, it's easy to imagine that there are many more investors waiting on the sidelines looking for an actual light at the end of the dilution tunnel before they jump.
Based on DryShips periodic updates, typically about fifteen to twenty percent of the trading volume has been due to new shares being dumped onto the market. At the end of today, July 26, that likely means there will be about $45M of dilution remaining. While the $26M that was dumped over the previous three trading days might have been abnormally high due to volatility resulting from the reverse split, it's likely that volume will be generally higher than normal going forward as the end of dilution closes in. If and when everyone jumps, volume is also likely to ratchet up very quickly. My guess is this will happen within the next few trading days and probably before Tuesday. A simple spreadsheet model can give an investor a feel for how this might play out.
The periodic updates by DryShips have historically given a weekly tally of the remaining dilution and investors can also get a feel for the dilution by monitoring DryShips' website, which currently shows 15,925,216 common shares outstanding as of today. Based on that share count, obviously all shares issued or to be issued to Kalani haven't hit the market yet.
It goes without saying that investing in DryShips is highly risky. While it does seem like there is an interesting opportunity starting to form, keep in mind that DryShips has a long history of being very shareholder-unfriendly. Many investors have been hammered by DryShips so far. There's a strong possibility that an investor can lose all of their money very quickly by investing in DryShips.
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in DRYS over the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
https://seekingalpha.com/article/4090885-dryships-penguins-waters-edge
'$Pistol Pete$'. Agree
'$Pistol Pete$', fully agree with your post.
You enjoy the weekend as well.
'1234jklm', somethings up indeed. I personally feel that PMCB is going to get very interesting soon. This weeks trading in PMCB seemed strange to me.
Go PMCB, your time has arrived.
'rudygerner', Wow what a find. Thanks for posting this really interesting tidbit. I went to that FB page and I find the post quite interesting indeed.
Somethings up with PMCB for sure, I feel it. The trading lately has been weird also.
Go PMCB
I'm with you here $Pistol Pete$. Long-term shareholder here.
'Bayluv03', As a long-term investor here, I love the silence. It should be this way, otherwise if a non-event press released is issued the nay-sayers and shorts will knock the stock down. Happens every time, but now things has changed for the better here.
Go PMCB, keep up the professional work.
'thenewmixer', I really do not care or get concerned what Mr. KW tells anyone. As a long-term investor here I'd rather the company ONLY release a press release when there is any material news.
If they press release every little tidbit of news of what goes on behind the scenes then the stock will get hammered as it has been. Then the naysayers and non-believers here will post that the company is just "pumping and dumping". It's happened every-time here.
I personally like the silence at the moment. It tells me they are working hard behind the scenes to get the IND done in a perfect professional manner.
GO PMCB, and please only issue a press release when there is material news. Then the shorts and naysayers will not know what to do. EOM
'thenewmixer', I've been a shareholder here for quite some time now. The reason I think there was no press release is because every-time a press release is issued, the stock gets hammered.
Then the naysayers start posting crap. I personally like the silence here, as I like to invest in companies that do not issue press releases until there is actual material news.
I'm pleased that PMCB is being hush about what is going on behind the scenes. Only release a press release that is material.
Go PMCB
___________________
Not Frank.
Not shark.
What has he done??? Deals happen and deals fall through at times. At least there has not been a BK. In given time this company will grow, these things take time to turn around. Stock buyback and no RS is a good thing here also.
Great things are going to happen here in due tine, patience required at the moment.
In due time, patience required.
PharmaCyte Biotech's CRO, TD2, Announces Partnership with Deep 6 AI to Accelerate Oncology Clinical Trial Recruitment.
TD2 and Deep 6 AI Announce Partnership to Accelerate Oncology Clinical Trial Recruitment
announced today a formal agreement to work together in the fields of oncology and fibrosis to rapidly match eligible patients with appropriate clinical trials.
TD2INC.COM
http://www.td2inc.com/news/td2-and-deep-6-ai-announce-partnership-to-accelerate-oncology-clinical-trial-recruitment
'gdog', attorneys only win in these kind of lawsuits. It's a waste of time as far as I'm concerned.
Also no R/S needed here, as there is a dutch tender share buyback occurring.
The only 8-K I see, is the results of the recent shareholder meeting. Do you have a link to back up your post???
Maglan Capital @MaglanCapital
$GSAT Sum of the Parts Valuation- $10++ Buyers: $T $VZ $S $TMUS $CHTR $CMCSA $AMZN $MSFT $GOOG $AAPL $FB $NFLX
#SpectrumIsKing $STRP $DISH
https://mobile.twitter.com/MaglanCapital?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor
'2014shelby', no need to R/S with the dutch tender occurring.
Someone purchased all the shares that was on the Ask @ $0.0001 this am.
'gdog', you may as well forget about a R/S, not gonna happen.
No R/S anytime soon.
Great, I was thinking the same. Have a great day, Pete.
1,500,000 trade @ $0.0556 at 13:28:48. New fund purchase?
Everyone here is worried about the share price. I'm thinking this is being manipulated downwards for the new caniboid fund to buy in. Seen this occur many times.
'TheBestInvest', as a long-term shareholder here, I prefer that they keep quiet until they have material news. If a proposed date etc is given and then not met, the short sellers have fuel to bash and short. I'm pleased with the silence.
'$Pistol Pete$', you enjoy the weekend as well.
Goldmind, I bought back in @ 0.915 late this pm.
'masahirox', I bought today for a bounce.
'OTC BB King', we will see.
Is MannKind Corporation Getting Ready to Sell?
An SEC filing gives a hint that the company's board is at least thinking about the possibility of a sale.
Keith Speights (TMFFishBiz) Apr 10, 2017 at 4:22PM
In just over four months in 2017, MannKind Corporation (NASDAQ:MNKD) stock has lost more than half of its value. It seems that nothing can go right for the long-suffering biotech.
Over the weekend, though, MannKind submitted a filing to the Securities and Exchange Commission (SEC) that could provide a hint of something big on the way. Is MannKind getting ready to sell?
Change of control agreements
On Friday, April 7, MannKind submitted an 8-K current report filing to the SEC. This filing stated that the company had entered into change of control agreements on April 6 with its top management team. MannKind CEO and CFO Matthew J. Pfeffer; chief commercial officer Michael E. Castagna; corporate vice president and general counsel David Thomson, Ph.D., J.D.; chief medical officer Raymond Urbanski, M.D., Ph.D.; chief technology officer Joseph Kocinsky; senior vice president and principal accounting officer Rose Alinaya; and chief people officer Stuart A. Tross, Ph.D., were named as the executives entering into these agreements.
Under the change of control agreements, each executive is guaranteed employment for two years following a change of control. In particular, the agreements stipulate that the executives will hold a position with responsibilities similar to what he or she had prior to the change of control, work at the same location as before the change, retain a salary at least equal to his or her previous salary, be eligible for annual performance bonuses, and receive other benefits.
There was also a "golden parachute" provision in the change of control agreements. If an executive is terminated (other than for good cause) or resigns for good reason within two years following a change of control (or prior to, but in anticipation of, the change of control), he or she would be entitled to several benefits, including an 18-month severance, a bonus 1.5 times the size of the average bonus over the previous three years, and health and dental insurance for up to 18 months.
What it means
What does all of this mean? For one thing, it means that MannKind's board of directors is thinking about the possibility that the company could be acquired. It also means that it values the current management team enough to make sure they would be protected in the event of a takeover. Both of these things make sense.
The board certainly needs to be actively considering the prospects of selling the company. MannKind has been trying to do everything on its own since Sanofi (NYSE:SNY) threw in the towel on inhaled insulin Afrezza. Even though Sanofi failed in its efforts in marketing Afrezza, another large company with more financial resources could have a better shot at achieving success for Afrezza than MannKind could by itself.
Selling the company could also be in the best interests of MannKind's shareholders. The stock hasn't just lost more than half of its value in 2017 so far. Over the past three years, MannKind's market cap has plunged by 96%. Investors who bought the stock when it first went public and held on have lost 98% of their initial investment. There's virtually no chance to recover these losses, but a sale of the company could help shareholders at least a little.
Someone who hasn't watched MannKind closely might think that a management team that has overseen a stock meltdown like this wouldn't deserve any special favors. However, several of MannKind's executives are relatively new to the company. And while CEO Matthew Pfeffer has been with MannKind since 2008, he didn't become CEO until last year.
More important, MannKind's current executive team seems to have done a pretty good job playing the hand they were dealt. When Sanofi pulled out, no one knew what would happen. Pfeffer not only made several good hires during a very uncertain time, he and his team negotiated a good settlement with Sanofi that brought in much-needed cash. They also kept the stock from being delisted.
In addition, management quickly hired a sales team and began what appears to be a smart marketing campaign for Afrezza. Along the way, MannKind made more progress than Sanofi ever did in securing reimbursement for the inhaled insulin drug from payers. As of February, 70% of Americans with commercial health insurance had access to Afrezza with only minimal or no prior authorizations required.
What it doesn't mean
Although the change of control agreements indicate that MannKind's board is thinking about the potential for a sale, it doesn't mean that an acquisition of the company is imminent -- or even likely. Even if MannKind wanted to sell out, there's no guarantee that a buyer could be found.
That being said, it's possible that a larger company could be willing to make a bet that Afrezza and MannKind's technology could be worth significantly more than what MannKind is trading for now. It would be a gamble, but MannKind's market cap has been battered down so much that the risk would be less now than it would have been earlier.
MannKind shareholders shouldn't get their hopes up of any big acquisition just around the corner. However, they should be at least a little reassured that the board is thinking about the possibility.
Forget MannKind Corporation: "Total conviction" buy signal issued
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Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
https://www.fool.com/investing/2017/04/10/is-mannkind-corporation-getting-ready-to-sell.aspx?yptr=yahoo
You're welcome. '$Pistol Pete$'.
'$Pistol Pete$', same here. PMCB gets my vote everyday.
Wow, PMCB is way ahead in the "VOTE for the buzz of BIO". Votes = 1038
http://convention.bio.org/buzzofbio/voting.aspx