The Ships are not Sinking.
Just a quick "heads up" on why DCIX shares are falling this morning.
They are issuing between 8M and 9M (depending on whether or not the underwrites decide to buy an "overage" allotment), at $6.25 per share.
This will be a dilution (to a certain extent) of the outstanding shares in the neighborhoold of 30% to 36%.
There are many investors who automatically sell when new shares are issued, so in the premarket, they were down to just over $6 per share. Don't know yet what they will be when the market opens.
The use of the proceeds of the new share issuance is for possible additional vessel acquisition, pay down on outstanding bank debt, and/or general coporate purposes.
They have not yet identified any specific additional vessels, and their current draw down on their credit line is $92M on a minimum line of $150M.
When it comes to the dilutive effect of new share issues, I always want to know the reason they are being issued. i.e. is the company losing money and needs additional cash to survive, or are they using it for "positive purposes". In this case I view this as "positive".
They will be issuing their Q2 earnings information on August 1, and they have previously stated that it is their intention to pay a quarterly dividend of $0.30 per share.
Their fundamentals are good, with significant debt to equity coverage, and solid cash flow and income for at least the next 18 months or so.
Now as to the reason for this posting at this time, I see this as an opportunity to get into this company at a 15% to 20% lower price than their recent values, or to add to your position if you are already in.
There is an announcement, and an SEC filing available on their website if you care to wade through it.
I will be following up (as time allows) with more detailed information as to why I really like their business model, and why their charter parties have an incentive to do these deals with them.
As always, do your own DD, and good luck if you decide to get in.
JMO and worth exactly what I am charging for it.
My apologies if I made typing errors in this post, but I wanted to get it out quickly.