PBK - Aloha. Notice the moniker of the individual that wrote the "article": Short Only. I believe that says it all.
While there are nuggets of truth in the article, there are also many inaccuracies and emotion based statements. So what do we know about DRYS:
- yes GE is a self-serving scumbag
- DRYS is currently upside down in the debt versus ship values (~<$40 mil>)
- Assuming DRYS buys all 4 VLGCs the NAV will be north of $240 million
- DRYS will likely post ~$6 million/quarter in ebitda associated with the 4 VLGCs beginning 1Q/2017.
- Unclear what the Panamax fleet will bring to the party this year. BPI is improving though and overall fleet performance should improve. Likely to continue in loss territory this year though.
- OSVR fleet is and will be in loss territory this year. May not improve for 2+years due to significantly reduced offshore drilling. Good candidate to find a new owner for this unit.
Reading the tea leaves though, dry bulk is on a good trajectory. As the world economy continues to improve in conjunction with the BWTS regs kicking in 9/8/17 there is a very real possibility that many ships will be scrapped and result in a very big run up in shipping rates. This could easily be a similar scenario when China increased their iron ore imports and rates ran up dragging DRYS to over $100 pps. Ships that cost $25 mil to build were selling for $80-$100 mil. There is a confluence of events ahead that could be very exciting. What GE does over the next month or 2 will start to shape whether shareholders can make anything out of their investment. Again though, I would be cautious with this stock.
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