At the moment there is only one thing that is of any importance to DRYS shareholders - will GE request an extension from NASDAQ regarding the delisting. Assuming he does follow through and DRYS continues to be traded, there is no way the shares get back above $1 all on their own. GE will move for a 1:10 RS.
Consider the ORIG shares are held on the books at more than $9/share; the ships are all held for sale and would perhaps squeak out $20 million after all debt is repaid (based on the $244 million assumed value after the impairment); it is unclear how much cash will be on the books at year end. The sum value of the parts won't get DRYS to $1 especially so since the remaining ships are barely breaking even on revenue. The ongoing enterprise value doesn't warrant a high multiple especially so if we assume the ships aren't profitable.
The shipping units could make money over the next year if scrapping picks up and significantly reduces overall tonnage available in the near term (10 bulkers arrived in India last week for scrapping). 10 Panamax ship deliveries were moved from 2015 to 2016 which continues the trend that started up again earlier this month after the monsoon season ended. 94 Panamax ships are still scheduled for delivery before year end. Keep in mind though, there are 199 Panamax ships that are beyond their 25 year economic life. New regulations coming into effect after the first of the year will force owners to make the decision to scrap or upgrade and the upgrades are expensive.
If all Cape and Panamax ships 25+ years old were sent to the scrap yard, as they should be, rates would actually stabilize and increase over the next 2 - 4 quarters.
I am still looking for 2.5% to 3.0% worldwide GDP growth over the next 2 years. This will continue to grow the demand side of the equation for shipping. However, it will not be sufficient to consume the total available tonnage. With that said, scrapping will continue to reduce the supply and accelerate after the first of the year primarily due to regulations and lack of cost effectiveness to operate/maintain the ships. Mid 2017 will be much better for shipping. Will DRYS still be in the game and as a public company then seems to be the question.
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