DryShips Inc (fka DRYS)

[Net-Man]

One of the biggest problems with DRYS is the rear view mirror approach to analyzing the company. The balance sheet has changed significantly this year and it is essentially an entirely new business. The two quarters that have been reported this year show the trajectory of that change. At this point in time and with the additional $100 million capitalization from the pending rights offering, DRYS will be grossly under leveraged next month. I am sure GE will pay himself back from the revolver and replace it will commercial debt. One question is which business unit will GE add new ships to.

So, at the start of 3Q what will revenues look like? There is no history to fall back to on the ships that have recently been added to the fleet and nothing yet on Heidmar. Unclear at this time what revenues will be only that the gross will certainly be higher. Over the next 2 quarters, however, will revenues produce positive results? All indicators are pointing to very positive results especially by 4Q.

Pick your reasoning, NAV or revenues, and it seems very clear that DRYS is undervalued with 104 million shares outstanding.