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Kalani was less than 5% of the total trade last week. Why do you think it any different today? Seem to me they have slowed way down on their selling. It isn't sure bet any more to be short DRYS.
Uh oh. Looks like shorts are about to get spanked.
fwiw - My thought is that DRYS has the cash on hand to pay for the 3 remaining VLGC's to be delivered. There's no rush now to get the remaining $33 million from the Kalani dilution. It is also expected that DRYS will report 2nd quarter financials this week. Assuming a positive report, that could easily ignite the pps and allow Kalani to sell the remainder for significantly fewer shares.
As of Friday, DRYS had 31.5 million shares outstanding. Pick a number I suppose, but at $4 pps, 8 million or so additional shares would complete the deal with less than 40 million outstanding.
DRYS is getting all the more interesting. Depending on your guess for how many shares will be outstanding when Kalaini is done, the NAV will range from $10 - $16 dollars.
GE is on record indicating $77 million ebitda next year, which would equate to a $23 pps with 50 million shares outstanding with a pe of 15x. Fewer shares outstanding and/or a higher pe will obviously yield a higher pps.
I will be the first to say that GE will do whatever benefits him and there is no telling what he might do next. One thing that does seem certain, everything he has done he has also put in a 6K and reported via the SEC. As ash points out, GE has stated once the latest Kalani dump is completed, his next phase is commercial capital raises. There seems to be limited down side at this point.
TBK - I disagree with your assessment that Kalani is on autopilot. Considering GE requested $11 million last week and Kalani sold $8.5 million would seem to underscore that point. I don't have a crystal ball to know whether the pps will go up or down today, but it does seem clear that kalani is showing restraint on when and how much they sell. My guess, and just like everyone else here it is just a guess, the total OS will end up being well under 50 million when this latest round of dilution is completed. My further guess is that number may be closer to 40 million assuming the pps continues to move higher.
From the start of last week through the end the pps climb 35+%. I wonder what that would look like if it did the same thing this week?
GE/Kalani showed a good deal of restraint last week. Here are a few numbers that might be of interest that were pulled from Friday's 6k:
6,468,432 shares were sold last week
$8,414,177.79 was collected by DRYS
Kalani total sales were $8.5 million
Average share price was $1.30
I found this particularly of interest:
DRYS requested a total of $11 million be sold. Kalani sold $8.5 million
The least number of shares sold were at $0.99: 780k shares
The greatest amount of shares sold were at $1.44: 3,675,528 shares
I think there has been a clear change in how shares are being sold into the market.
Another point that should be made is that DRYS now has all of the cash and commercial financing in place needed to pay for the VLGC's. Perhaps without that pressure GE is allowing the pace of distribution to slow down. Consider that Kalani was about 7% of the total 112 million shares traded last week.That is a very significant departure from the previous 15-20%.
Thanks LW
Since November there have been very strong and compelling reasons to short DRYS. There was the unknown number of shares to be diluted; GE was oblivious to the price received for any new shares. His only focus was on how much money he could get and how fast.
At this point the amount remaining in the dilution is small. At current prices the number of shares that will be sold to achiev the total Kalani amount is quantifiable, which it really hasn't been up to now. If this was any other company without the stigma of GE, the remaining $33 million wouldn't cause a ripple in the share price when compared against a $500 million NAV. It begs the question why is DRYS trading at $1.35 versus something closer to $15, which would be much more in line with its actual value.
Last week's trading would seem to have been a much different scenario and was more about volume and momentum in both directions. It was a definite break from the easy short trade that many have become comfortable with. Consider the pps ended the week 30% higher than it was at the start of the week. I believe that could signal a sea change for DRYS.
Compare the amount of money collected week to week for the past 2 months and it is clear they have slowed the pace of selling. 31.5 million outstanding with $33 million left to distribute. If the financials come in better than expected and the pps reacts accordingly, the total outstanding could easily end up well under 50 million. Next week could be fun for longs.
TBK - that's probably a good guess. Between the MM's, robots, and day traders, there was a huge volume traded. Interesting that Kalani has slowed so dramatically. I am wondering if that isn't being timed around the quarterly report. If so, it would seem the report must be fairly good and they are expecting a very big rally.
Not if it is naked shorting
Not even close to what I was expecting. Kalani has slowed way down from what they have done previously. That's roughly half of what they had been doing previously. It does underscore the vast amount of the trade is just day traders and algorithms. All contrived and little or nothing to do with Kalani.
I am thinking somewhere closer to $21 million.
111 million shares traded
@ average $1.30
Kalani has been minimally 15% of the total volume each week. Some weeks as high as 20%.
I used 15% and guessed an average $1.30
We shall see soon enough.
ash - we never know. The share price has been divorced from the underlying business for some time now. Dilution and shorting have been the only path for the shares all while the business significantly improved not only by building the fleet, but also the associated revenue stream. GE has finally put together something that may actually add shareholder value - at least going forward for awhile.
The Kalani dilution and shorts exploiting it have been the primary reason why DRYS pps has not reflected at least NAV. Keep in mind the dynamic: Kalani shorts DRYS then he sells newly printed shares to cover. Shorts borrow the new paper, sell it, and further drive the price down. Kalani's paper is likely the only shares that can be borrowed at this point. So once the Kalani dilution is complete there won't be any new shares to short. Once the selling pressure from these 2 groups ends, the pps is very likely to find a much higher, natural equilibrium price more closely aligned with NAV.
I think most would be happy if got back above the 50 day.
Sam - I spoke with Adam yesterday and suggested they might update the site. He was agreeable. Not sure when/if any updates will be coming though. My focus is still on pending contracts. The information from the principals of the projects is astoundingly good. Like all things though, nothing happens until it happens. The Canadian project is in countdown mode. 6 weeks or less until we know definitively whether they get the needed funding.
Ooops. So much for $1.02 LOL
What I find the most curious about DRYS is that most of the volume is short selling not Kalani. Of course Kalani is part of it, but my guess is 15 million out of 100 million traded so far this week. Even borrowing 100% of the new shares only accounts for less than a third of the total trade. Likely a lot of naked short selling by the MMs in there yesterday and today to get some shares back after the huge run up. The MMs will no doubt want to cover tomorrow along with shorts not wanting to be in over the weekend. Tough to know what GE will announce in the 6K after close tomorrow or what the financials will report. DRYS is definitely on a good track from a business perspective and, as ash reminds us daily, their expected revenue next year will be a catalyst.
BDI is moving up, Kalani is just about done, and GE claims no more dilution. So far everything he has said he would do he has. Getting shares to short is becoming more of a problem and without constant new supply, it also seems that shorting in general will stop simply because there won't be any more shares to borrow. All in, the DRYS story for a long position would seem to have more pros than cons.
I doubt it. My guess is they will report having collected somewhere around $18-$20 million and sold 17 million shares. that would bring the total OS to ~42 million.
EH - I think it could be less. Kalani has consistently been 15-20% of the trade each week. that will be at least 15 million shares this week. Pick a number for what their average sale price is to come up with a total amount collected. I've been using $1.35, which seems a bit low to me. that would be over $20 million collected by tomorrow close. GE reported they had $41.4 million left last Friday. I suppose we will know more certainly after the close tomorrow if they post another 6K.
DRYS will have traded nearly 100 million shares by the close today. At the 15% distribution rate that Kalani has been running at, they should have collected roughly $20 million so far this week.
I wonder how this will play out tomorrow afternoon. Pick a number between $15 and $30 million for the remaining Kalani dilution. DRYS will be reporting on Monday too. I wonder how these events may pressure shorts?
TBK - Time will tell of course. My thought is even if the final OS is around 60 million, the NAV would still be several times higher than where the stock trades now. I really don't see another RS, which is a departure from where I was at just last week. The amount of dilution is winding down and, while it is certainly adding more shares, it is also adding to the NAV and ultimately the value overall.
As you pointed out, throw into the mix a reasonable financial report and any positive words from the company and the price is likely to take off. We'll see...
TBK - I don't know about that. Shares are trading up 6% in pre-market with strong numbers pushing the price up. Anything can happen, but I think yesterday was more about MMs getting some shares back after the 75% run up the day before. We won't know until tomorrow when/if another 6k is released telling us how much is left to dilute. My guess is $30 million would be on the high side and it could be as low as $15. Money is moving in from the sidelines and it doesn't seem all that likely the pps will be sub-dollar any time soon.
Moving up with large bids: $1.41
Sam - there have been plans in place for sometime now for Mailand to set up 2 production lines. After an initial start up phase of 6 weeks or so, they believe a KDS could be shipped every 2 weeks. If other European projects come in as expected (not by FASC but another project development company), I doubt Mainland would be able to scale up enough. If those additional projects happen it will be a good problem to have.
83 million shares traded since Monday. Assuming Kalani has been 15% of the volume at an average prices of $1.30, they have collected roughly $16 million so far this week. According to the 6k last Friday (7/28) they had $41.4 million left to dilute. If they staid on track for their usual 15% the balance remaining is $25 million or so. Just guessing, maybe $15-16 million left after this Friday without something to push the price up.
Kalani should be at or below $25 million remaining at this point.
I am beginning to think the Kalani dilution may complete this week ahead of financials next week. Should that take place... well, it should get interesting.
Sam - The KDS is still very marketable. There is a major project that is supposed to be closing on several million in financing the 1st or 2nd week in September. We will know more about that very soon whether it makes it or not. Some serious people involved though and I believe the sales that will be associated with that particular project and several others will keep FASC and Mainland Machinery very busy for the next 12-18 months.
Kalani on the ask with a big block?
It does make me curious about how many shares kalani has offloaded so far this week? At 15% the number so far would be roughly 9.5 million or some $12 million? Under $30 million remaining and the number is getting smaller quickly.
OOOPS
At this rate, it seems $2 will happen in the next half hour?
Who knows really where they sold at. the point is that as the pps continues moving higher, he will have to sell fewer shares to get the remainder of the deal. Fewer shares sold means a higher NAV per share for whatever the total OS ends up being.
Kalani may just finish the day with less than $35 million left to dilute. The amount is counting down fast now. DRYS could wind up with a lot fewer in the OS that was originally thought.
I wonder when/if GE will take a position and if so, for how much? It could be an easy way for him to turn a $25 million investment into $100-$150 million rather quickly.