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EH - I don't trust GE and DRYS won't be a long term hold. At some point though the dilution will be done, at least for a while. That may be a point to a position a for a bit. Then the next kick in the ass is no doubt waiting for investors. GE has a $2 billion registration that I am certain is burning a hole in his pocket.
EH - According to a recent Seeking Alpha article, GE still has over 104 million votes. A 1 for 6 split will leave him with over 17 million votes. So that would require more than that number to be exceeded after the next split before he would lose control over the vote. With that in mind, I am guessing he will conduct at least one more RS within the next few weeks and bring the total OS down to around 9 - 10 million. Kalani will no doubt be pushing new shares into the market, but at a higher value. My further guess is the total OS will land at about 50 million when the dilution is finally done. GE won't have control over the vote. Unfortunately there are enough other "features" that have been provided him it might not matter all that much.
BS1 - depends a lot on how close they get to completing the Kalani deal before the next RS. Other than that I would agree.
BlakeSnake - My guess too. maybe in August?
It looks like the outstanding will double this week if Kalani stays true to form. They have been trying to get $1.5 - $2 million each day. Given their track record and the declining share price, 30 million OS this weeks seems possible. PPS down to $1.25 - $1.35 by Friday?
I wonder when the next RS will take place? That would seem likely in the next 2 weeks. 40 -50 million OS by end of next week. So perhaps a 1 for 6?
Not with my money.
I would agree the debt financing will be a big deal for future shareholders - maybe. Right now it does nothing to stop the dilution that is underway. Anyone buying now will simply lose 75% or more of whatever amount they "invest" in DRYS. Once the dilution is complete and at least one more RS is done, anyone buying then might have a chance to make some money with DRYS. For the next several weeks though, this is a short or at best a quick trade.
What GE didn't do is rescind the equity offering through Kalani. So expect another $140 million or so of dilution. So current owners of DRYS shares can expect their shares to be diluted another 75 - 80%.
The preferred is being diluted also. What is more important is the number of votes the they have is being reduced by every reverse split. Currently GE has roughly 70 million votes compared to the 12 million common outstanding. Assuming a 1:5 reverse split in June, GE's preferreds will have about 12 million votes and the common will be reduced to about 10 million. The gap is closing, which is why I believe that will be the final RS and dilution for a while. GE would lose control of the vote otherwise.
DRYS pps is down roughly 60% from the recent 1:7 post split open. This after a 39% distribution of $84 million out of the $226 million total. With $142.5 million left to distribute it makes me wonder how many RSs are in the future?
On 5/11 GE reported there were 9,628,959 shares outstanding after the 1:7 reverse split. Two weeks later there are now 13,778,247 shares. This represents a 43% dilution. Again that is for 39% of the total distribution amount.
GE is on track to complete his monthly RS in June. At the pace he his on with printing new shares, I would guess a 1 for 5 or 6 split next month.
The 4 containers added just today should add roughly $2 million/month in ebitda. This should take offset the net loss reported in the 1st quarter.
Basically GE sold a ship to DRYS. I am sure he took a profit on the sale. He contractually, as DRYS representative, collected a fee as DRYS representative on the purchase, and will make a profit again on the time charter - 50% of profit. DRYS will get whatever meager amount is left over after paying for the maintenance, crew, fuel, dry dockings, etc. GE wins again and is very thankful to the "investors" that paid for his additional wealth!
GE's history. He has done nothing that would lead to a different conclusion. DRYS still needs the cash to pay for the contracted ships. So GE will continue the Kalani dilution until he has the balance.
Roughly a $40 million market cap today. Probably 13 million or so outstanding. $145 million in shares left to distribute. At this rate, it seems as though Kalani/GE will have to dump another 40+ million shares. 55 - 60 million OS by the end of this latest round of dilution. PPS is likely going to wind up at or below $1 followed by yet another RS. Maybe 1:6 or 1:7 resulting in 9 or 10 million OS.
If you think this is a bad scenario consider the next shoe will likely drop after all of the splits and investor plundering is completed. GE is more than likely going to make a buyout offer, which the independent board will no doubt support. With his controlling vote, it will be a done deal and GE will walk with all of DRYS for his Sifnos loan and maybe $40 mil cash. $240 million to buy $500 million in NAV. Not a bad deal for him!
Rinse and Repeat: DRYS_2 will come public and GE will make money on the sale of assets to the new company and control that to death as well.
The only upside to the RS is that GE's votes attached to his preferred shares is getting diluted as well. I believe that count is around 70 million at the moment. Another RS or 2 will break that control and common shareholders may actually have some control over the company - at least until the next GE screw you.
My guess is the that in the short-term the pps is headed lower. GE very obviously is only concerned with getting the cash to complete buying the ships that are contracted for. The timeline appears to be by the end of June, which would align with the delivery schedules for several of the ships.
If we look forward though and assuming he stops the dilution and is able to complete the loan syndication, DRYS will have ~50 million shares outstanding , roughly $1 billion in assets, and $400 million in debt. The company probably won't be profitable until next year, but could be investable except for one issue. Can anyone trust GE? My take is this is a short-term play at best simply because GE is so disdainful of investors and is clearly morally bankrupt. Maybe some time towards the end of June or July - maybe.
At the current pace it seems like another r40 million shares will be printed by GE. This is so clearly about empire building and nothing at all about creating shareholder value.
The $12 was based on split adjusted value.
didn't this just do a 1:20 reverse split?
I don't believe the issue is how many shares are outstanding, but how many shares will be outstanding over the next few weeks. From 9.6 million to what? Will the latest round of dilution add 35 or 40 million additional shares? Once the distribution is completed, will GE immediately launch another dilution? These are the risks along with all of the insider double dealing that is keeping DRYS pps down.
A little history helps - Several tankers were converted to VLOCs when rates were astronomical. Of course, the ships weren't designed for dry bulk and the result is not just cracks developing but ships actually sinking. The good news, if there is any, there were a limited number of conversions. Just the same, there is likely going to be a number of ships sent to the scrap yards this year because of the problem.
Overall scrapping is at a slow pace this year. However, I expect it to start speeding up as the year progresses. Especially so as Sept gets here and the BWS regulations kick in. I expect a lot of scrapping from that point forward for a while given the associated costs to complete the upgrades will be too expensive for older ships. 2018 could see a big spike in rates.
What risk factor would you associate with DRYS? They are currently bleeding cash and will have $400 million in debt (or more) very shortly. Asset side will be roughly $750 million. $350 NAV maybe with 50 million shares outstanding. I am not sure what catalyst there might be that would provide trust in GE. My guess is he will steal all of the cash he can and then proffer a take over bid. The board, of course, will be all to accepting of it and "investors" will vote for it. Remember that GE still has about 100 million votes with his preferred shares.
I think GE will end up taking DRYS private for about $50-$60 million.
I wonder what the market cap is with the implied 40+ million shares outstanding after the Kalani dilution machine is finished with this round? Is the current pps far off what the valuation will become with that number of shares?
I haven't kept up on ORIG. Is there really any hope for the common shares? My assumption has been the debt holders would own everything coming out of the bankruptcy. Has something changed or is this just another GE destruction of shareholders?
likely $45 - $50 million. All a function of the presumed number of shares yet to be dumped.
Only if GE wanted to take it over. That might still take place I suppose. GE still controls any vote with his preferred shares rights and there are several poison pill provisions in the bylaws. No chance anyone will take this over other than GE.
1 hour into the trading day and DRYS has already traded ~12% of the OS. Seems Kalani is actively dumping today.
tob - I would have been more direct. What TOPS, DRYS, and ORIG all have in common - GE!
I suppose that out of 150 universes, in one of them there is a GE that would give back $90+ million as a special dividend. In this universe I believe it more likely GE will dump another 35 million shares to complete the Kalani distribution.
Pump and dump. With ~$145 million left to dump, how many shares will GE distribute? At the current pps it will double the OS. As the pps drops from the new volume though, it seems clear the pps will drop. How much it drops will be a factor of how many shares are dumped each trading day. My guess is this will trade down to $3.50 - $4.25 range.
What was missing from that or was an inclusion of the $145 million in dilution yet to come. This is headed down a lot before any real chance for a pop.
Anyone one know when Q1 report will be made?
More likely .05/share by the time the next dividend is announced
It looks like Kalani stayed out of the mix today based on the volume.
The tape would seem to disagree with that thesis.
here comes the pump and dump!!!!
boston - the pps is currently 5.31 pre-market. Read the filings. Kalani has been hired by GE to distribute shares to anyone that hasn't done the due diligence. Basically, they are dumping another $145 million onto the market. There is no set number of shares only a set amount. Be very aware of this one.
boston - nice pump. Too bad it ain't true. The dilution is like a never ending flood!
tob999 - if we combine those numbers, the current NAV is $425.6 million. GE loves to use the post split OS to arrive at the NAV per share. What he never includes is the likely OS after the next round of dilution. Use whatever number you like, but my guess is for 35 - 40 million new shares to be printed to finish up the Kalali dilution. Assume an ending OS of roughly 50 million shares, the NAV per share drops significantly to around $8.50. So prior to the last 1:7 split the pps would be $1.21.
Can anyone trust GE to stop the rinse and repeat financing that is killing off shareholders?
DRYS has a lot of newly printed shares to distribute yet. Combine that with the fact that Q2 is likely going to be in the red and there isn't much reason for this to move up. That's not to say that when the latest round of dilution finishes there won't be a window for the pps to rebound. But then what? If GE continues to add ships to the fleet using the printing press this will never hold value for investors and will only make money by being shorted. Keep in mind he just announced $200 million in possible loans which would be a reduction of the $2 billion shelf registration. What will GE do to consume the balance? Will that translate into another $1 billion plus in new shares? If you had 338k shares at the start of last year, you will now have 1 share left after the reverse splits that have taken place since. GE is the only shareholder making money from this company. Preferred shares are getting dividends, Sifnos, is getting paid, GE's companies are getting fees for everything from managing each ship to buying/selling ships.
GE is making a lot of money off of DRYS and anyone buying Kalani shares. If you have not been shorting, how is this working out for you?