When someone asked why he was doing the deal, here–now, he actually said, basically, ‘Because Americans are the dumbest investors around, and there’s lots of liquidity in this market.’”
CEO Dryship, George Economou
Peter Georgiopoulos, chairman of rival Genco Shipping & Trading (nyse: GNK - news - people ), blasted Economou in public recently, saying shippers like Economou "
play games with their shareholders' money."
Economou, who owns 34% of DryShips, has learned
StockMarketFunding.com asks where was the FULL DISCLOSURE regarding its breach of debt terms when it made it's last 10-K filing?
At StockMarketFunding.com, we believe investors and traders DESERVE to have financial transparency. We believe their should be a formal investigation into the announcement surrounding the breach of debt terms as shareholders lost approximately $159,000,000 overnight. Shares were not available to short for those who were long the stock.
Throughout this global crisis we have seen billionaires use publicly traded companies for their own personal benefits.
According to the downgrade details by Oppenheimer they "believe this could be significantly dilutive to current shareholders, despite the balance sheet benefits. Furthermore, unless two drill ship newbuildings are canceled and/or banks agree to slower debt repayment, DRYS may still need to raise additional capital. Despite the balance sheet benefits of the share issuance, firm says the overhang is likely to keep pressure on the stock for some time."
Jefferies notes that DRYS filed a shelf registration for the sale of $500 mln of the co's common shares.
The firm says that while the anticipated proceeds from the share sales should boost DRYS' cash balance to over $1 bln before inclusion of the co's projected cash flow in 2009, they believe that existing DRYS shareholders are being diluted unnecessarily as they do not believe DRYS was in need of the additional funds given the co's current $600+ mln in cash, projected 2009 contracted cash flow of $500+ mln, and recent cancellation of $1.5+ bln in acquisition transactions.
Given the co's preference for cash at any cost even at the expense of existing shareholders, they prefer investors position themselves for the rebound in the dry bulk shipping market in names such as GNK, EGLE, DSX, or SB. However, they do believe
DRYS shares are likely to increase over the next 12 months with dry bulk shipping rates. The firm cuts their tgt to $24 from $50.
At StockMarketFunding.com, we believe investors should always have the facts upfront and due their own due dilligence before purchasing a stock or option.
Even with the appropriate due dilligence, you can still fall victum to the markets through these types of events.
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