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researcher - the $2 billion shelf registration is a very big question mark for DRYS future. I doubt GE's empire building is done and there is no telling what he will do next. One thing that is very clear, GE does not have investors best interests in mind.
TBK - My guess is his larger plan is to get the share price well above $5 so he can bring institutional investors back in. As I noted in an earlier post, I would expect him to get the outstanding back to around 30 million once the dilution ends. That would also involve him buying a block of shares that would give him control again.
Let's say he buys the final $25 million in shares after a RS back to 9-10 million outstanding. I think his plan is to come up with at least 14 million of the 30 million outstanding and then watch the price run up to 4x NAV next year. His share value would be somewhere around $500 million at that point. Not bad for orchestrating all of this crushing drama and a $25 million investment.
Agreed. The company value is higher and perhaps much higher. The share price is another story though. There are significant risk factors in buying now. The dilution is certainly one. The number of reverse splits to come is another and factors even more heavily on a future outcome for someone buying now.
As long as there are no further dilutions, that EBV works. The problem with that equation is it is based entirely on a snapshot from last Friday. I think we can all agree that GE has continued the dilution and will until he gets the full $75 million remaining in the Kalani deal.
I still believe he will control the chaos so the outstanding winds up around 30 million and he has a controlling interest. Given the rate of dilution, I still am expecting 2 more reverse splits.
As always, GLTA!
ash - I agree the pps should be higher, but it will be a function of how many shares GE prints and sells here. The outstanding could end up in the range of 60 - 100 million. That wide variation can lead to equally large variations in a potential pps.
The risk anyone buying here is the same as it has been since last year. How many additional reverse splits will be done between now and when the dilution ends (if it ends)? Longs have already be reversed out of their positions entirely. So DRYS is not a buy and hold stock at this point.
Any buyout would necessarily require full repayment of the $200 million revolver, could breach loan covenants, and then there all of those pesky GE controlled entities that manage and run DRYS behind the scenes. Of course, this is the least likely scenario along with BK that has been discussed in some time regarding DRYS.
The next ship delivery is September. So the only good news for DRYS might be the quarterly which is due around 8/8. Otherwise, it seems GE is still hell bent to pump more newly printed shares into the market regardless of price. Sad as it is, I suspect another RS will be announced soon.
~36 million shares outstanding as of last Friday. Probably another 10 million issued this week netting $9 million? $66 million left to dilute by this coming Friday? I believe DRYS will hit 45-50 million shares outstanding before the next RS. Another 1 for 5 split? By the end of August I think GE will have sold another $35 million in shares resulting in a 14 million outstanding. He will buy the remaining $25 million and get 12-13 million shares for the trade and be the majority shareholder without running it over the 50% ownership line. From $2.00 - $2.50 at that point, the pps will advance somewhere closer to NAV. Over the next 6-8 weeks though, this will continue to be a bloodbath.
Makes me wonder about all of the brand new aliases showing up and messaging how bad DRYS is. It seems to be well coordinated too. Beware the newbies.
The next ship delivery is September. So the only good news for DRYS might be the quarterly which is due around 8/8. Otherwise, it seems GE is still hell bent to pump more newly printed shares into the market regardless of price. Sad as it is, I suspect another RS will be announced soon.
~36 million shares outstanding as of last Friday. Probably another 10 million issued this week netting $9 million? $66 million left to dilute by this coming Friday? I believe DRYS will hit 45-50 million shares outstanding before the next RS. Another 1 for 5 split? By the end of August I think GE will have sold another $35 million in shares resulting in a 14 million outstanding. He will buy the remaining $25 million and get 12-13 million shares for the trade and be the majority shareholder without running it over the 50% ownership line. From $2.00 - $2.50 at that point, the pps will advance somewhere closer to NAV. Over the next 6-8 weeks though, this will continue to be a bloodbath.
I haven't posted in a while, but can say that FASC and partners have been busy. Watch for news over the next several weeks to come out of Quebec. A project there has signed a contract with lenders that will provide them several million dollars and some of that will go towards a multi-machine order of KDSs.
Other similar projects are underway in the US and may close in the fall as well. Each of those will need multiple KDSs.
If you were wondering, Brian is still looking forward to getting FASC relisted possibly with a name change maybe as early as next spring. Time will tell, but a number of things going on recently that are very encouraging.
ash - agree this could be a multi-bagger. But when and after how many RS's? If GE does 2 more at 1 for 5, anyone buying 1000 shares today will end up with 40. Tough decision to pull the trigger to buy here.
1 million shares in 3 minutes?
GLTA - hopes and dreams!
Ash - As I have said I don't have a dog in this fight. It seems very clear though GE does not care at what price he sells shares. His only goals are to keep the the pps above $1 and continue selling newly printed shares. He will be announcing yet another reverse split probably as soon as next week. Given this past week's performance, the outstanding could be as high as 50 million by next Friday. That would be almost a 100% increase in shares in one month!
If the Marshall Islands court sides with plaintiff is a big roll of the dice particularly given the history of how things have gone in the past. There are reasons after all why companies register there. Betting on a ruling in favor of plaintiff on Monday seems like a very big risk based on hopes, dreams, and a crap shoot.
You know ash at some point you are going to be right. For now GE wants another $74 million. He sold shares at .87 this week so I don't think he really cares where the pps is at as long as he gets the money. With ~29% dilution just this week, it seems another 100 million share could be distributed. That would be another 70% dilution from here. With 134 million shares outstanding the EBV might be sub-dollar when all of the dilution is completed. Assuming GE brings the outstanding down to 30 million, at least 2 more 1 for 5 reverse splits will probably be implemented. This summe is going to be a long one for anyone trying to go long here.
It doesn't seem very likely DRYS will ever be on the gray sheets. More likely another rs will be implemented soon, which will run the pps back up over $4 and probably closer to $5.
After all, GE believes US investors are dumb and will continue giving him money for paper. Why would he kill the golden goose?
ash I saw the WSJ article when it came out. I agree. The dilution will be done soon. Probably another 6-8 weeks.
I agree ash. The problem is that anyone buying here is likely to be reversed out of their position. $4.50 could be reached once all of the shares are out and trading.
There is no doubt that if DRYS share count was to freeze today and not additional shares would be printed the pps would move up and more closely reflect NAV (not EBV). Unfortunately no one can tell when that might occur. GE seems clear he will continue printing new shares until he completes his latest dump agreement with Kalani. So another $70-$75 million to go. It would seem a corresponding number of shares will be pushed into the market or more resulting in the outstanding number to easily exceed 100 million.
In the meantime, anyone buying will be diluted further and loose share value. Still don't see the case to buy DRYS yet regardless of all the pumping going on.
Morgan Stanley is down, what, 40% since they bought? That doesn't seem like a winning strategy to me.
After the dilution today, another $70-$75 million to go. Maybe the pps will only drop another 30%? Regardless it will be below $1 and GE will predictably implement another reverse split, where the pps will be promptly driven down again.
"Investors should take Mr. Economou’s quote not as an insult but as a critique and stop throwing their money down the wishing well."
You really should refer to the SEC filings and DRYS press releases. There were 26.6 million from last reports and likely another 8-10 million shares dumped since. The real number is now closer to 35 million outstanding.
My guess is 40 million OS by Friday next week and the RS will be 1:5.
EH - DRYS currently has a $200 million revolver that is owed to GE. They also just recently completed a loan facility for $150 million. $37 million of that has already been drawn down to pay for the VLGC just delivered. While that have drawn all of the money from the loan yet, it is part of their plan to pay for the remaining VLGCs. This might help:
http://dryships.irwebpage.com/press/drys053017.pdf
This SA article might also help: https://seekingalpha.com/article/4087081-dryships-closes-vlgc-credit-facility
Post acquisition meaning calendar year 2018. Unclear what the net revenue will be for 2017.
TBK - Unfortunate as it is, I would agree the law suit is a distraction and loosing proposition. There was a good article on SA this morning. The author detailed GE only needs another $13+ million to fully pay for all ships. The net $70 million would presumably be used for "general corporate uses". Once he finishes killing off the shares with further dilution and reverse splits DRYS might good for a bit. It's a bit like musical chairs though. When the music stops for Kalani anyone with a position might have a chance. Taking a position now is still fraught with risk.
TBK - It is hard to know the timing of the MS buys. Since they were so clear about the percentage owned (11.7%), I can only deduce it was sometime after 6/22 when DRYS reported 5,625,216 shares OS and 6/30 when they reported 15,925,216. So 11.7% of some number would suggest they bought when the OS was 9,094,236.
From the 13G:
Morgan Stanley
I.R.S. # 36-3145972 reported 553,532 shares
Morgan Stanley Capital Services LLC
I.R.S. #13-3292567 reported 510,494 shares
Total shares owned: 1,064,026
Considering the last report indicated 26.6+ million shares out, this looks to be less than 4% owned at this point.
As my momma always told me "look with your eyes, not your mouth". The 13G filed by Morgan Stanley clearly states 6.1%. Not sure where anyone could come up anything else.
So I think we can all agree the board can decide to implement any number of reverse splits as they deem fit. What they really means is that GE can do what he wants in that regard. So far he has not allowed the pps to linger below a dollar for any period of time. Depending on how many shares get dumped this week and the affect on the pps, DRYS will announce yet another RS on Friday.
While I applaud the lawsuit, I also don't believe it will have a happy ending for shareholders. There are reasons why companies like DRYS register in the Marshalls. They can do pretty much whatever they want to without any repercussions. Hoping for the best, but expecting no change.
Still no dog in this fight and good luck to all.
That's not my understanding. In fact, that's not how any of the recent splits have been implemented. Do you recall DRYS asking for shareholder approval for any of those?
ash111 - maybe not so fast with the end of the RSs. GE can do them at will, which was approved at the last annual meeting. Of course, that means GE voted for it, but nonetheless it is legally binding:
~snip~
3. the approval of one or more amendments to the Company's Amended and Restated Articles of Incorporation to effect one or more reverse stock splits of the Company's issued common shares at a ratio of not less than one-for-two and not more than one-for-1000, inclusive, with the exact ratio to be set at a whole number within this range to be determined by the Company's board of directors (the "Board"), or any duly constituted committee thereof, at any time after approval of each amendment in
its discretion, and to authorize the Board to implement any such reverse stock split by filing any such amendment with the Registrar of Corporations of the Republic of the Marshall Islands.
http://dryships.irwebpage.com/press/drys050217b.pdf
Giovanni - Due to the dilutions and reverse splits, GE's number of votes from his preferred shares has finally been reduced to less than the common shares outstanding. His control gets smaller with each new common share sold. With that said, he got his preferred shares and huge number of votes (100k votes per preferred share) by paying down some of DRYS debt and swapping for the preferred shares. My guess is he will either buy some amount of the Kalani dump to bolster his ownership stake or do another swap of debt for preferred shares with another huge number of attached votes. keep in mind he has $200 million in the DRYS revolver. That needs to be paid back in roughly 2 1/2 years from now. Any number of scenarios can take shape all of which can further impact investors.
As I pointed out, I don't have a dog in this fight at this point. Just watching for now.
That's a lot of risk to take on and go long right now. Can't say going short at the moment has any less risk. The only certainty is that GE continues dumping more shares. At some level of dollars remaining in the Kalani dump, large buyers will come in and at that point the pps will begin moving up. A lot will depend on how many shares are outstanding at that point, but the pps will advance. I believe GE and his shenanigans aren't finished and it will be a roller coaster ride.
I have said for some time now that it is important to separate DRYS the stock from DRYS the company. While the company is on track to do well over the next year, the shares are getting destroyed daily by the constant GE dilution. If that doesn't kill off long's value in the company the RS's will.
How is DRYS a bargain if they dump another 75-80 million shares. The likelihood of another RS within a week or so is looming large. Be fair about it, this is a roll of the dice for longs at the moment.
I certainly would not buy into the notion that GE is irrelevant. He could easily convert some or all of the revolver into new preferred shares with an outrageous number of votes, which is something he has already done.
With every run up, GE/Kalani have dumped even more shares. Today is unlikely to be any different. Still no dog in this fight, but good luck to all regardless of which side you are on.
TBK - It looks to me the NAV was somewhere around $17.60/share based on 26.6 million shares OS. The lawsuit is just business as usual for GE and the dumping will no doubt continue. Watching what he has done to TOPS he may not do a RS for another 2-3 weeks. Considering he is getting closer to wrapping up the dilution over the next 2-3 months, he may choose not to do another RS right away. The only certain thing is he will continue the dilution and anyone buying long will lose as a result.