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Monday, January 25, 2021

DryShips Inc. (NASDAQ:DRYS) Appears Far from Bottom

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DryShips Inc. (NASDAQ:DRYS) outstanding shares have soared in the last few weeks topping more than a 400% increase. The Greek shipping company now has more than 5.19M shares out – with a market cap of $61.23M – and the company’s dilutive equity sales show no signs of slowing. DRYS’s stock price has tumbled because the market can’t absorb all the new shares, which has led some investors to try and sue the company.

The dilution is coming from an agreement DRYS has with Kalani Investment Limited, which agreed to buy up to $226.4 million of the company’s common stock over the next 24 months. Through early July the company had raised $143.5 million via this offering.

DryShips Inc. (NASDAQ:DRYS) bills itself as a company that provides seaborne dry cargo and offshore support services. The company operates through Drybulk and Offshore Support segments.

The Drybulk segment provides dry bulk commodities transportation services for the steel, electric utility, construction, and agri-food industries. The Offshore Support segment offers its services to the global offshore energy industry. As of March 31, 2016, it owned a fleet of 20 Panamax dry bulk carriers with a combined deadweight tonnage of approximately 1.5 million tons; and 6 offshore supply vessels comprising 2 platform supply and 4 oil spill recovery vessels.

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DRYS does not seem to care about its share price and quoting the price is rather meaningless. With more dilution possible from Kahlani, the number will continue to fall. The company is set on raising 42 million per day and does not seem concerned with how many shares it puts out.

DRYS has been raising serious cash sums through equity financing – in less than a year, it has raised close to $1 billion in equity financing by issuing about quarter billion new shares and couting. Existing shareholders (including day traders) must have lost their entire investment because of the non-stop reverse splits and share dilution.

CEO George Economou is subjected to enormous conflict of interest because of his private company’s dealings with DryShips. He has gained powerful voting rights by exchanging his $8.75 million debt for preferred stock.

Sadly, shareholders have no final say on the company’s actions. This is why the company can and does keep performing unlimited reverse splits and non-stop share dilution.

DryShips Inc. (NASDAQ:DRYS) is going to continue to find a bottom. The dilution will continue because the share price is irrelevant to management. The company is raising money and has no regard for shareholders. For continuing coverage on shares of $DRYS stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

Disclosure: we hold no position in $DRYS, either long or short, and we have not been compensated for this article.

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