DryShips, Inc. (NASDAQ:DRYS)

CAPS Rating: 3 out of 5

The Company owns and operates fleets. The company's fleet carries various drybulk commodities, including coal, iron ore, and grains, bauxite, phosphate, fertilizers and steel products.

Recs

61
Player Avatar abitare (39.81) Submitted: 6/13/2008 10:34:46 AM : Underperform Start Price: $68.57 DRYS Score: +147.62

“It was surreal. 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

The secondary offerings, plus the testing of the stupidity aka enthusiasm of the market with another "drybulk" shipper. Safe Bulkers (SB), a company with a record of FOUR EMPLOYEES! Unlike DRYS which has TWO EMPLOYEES! LOL!

http://finance.yahoo.com/q/pr?s=SB

http://finance.yahoo.com/q/pr?s=DRYS

Here is my post from 20 May 08.

I am not in the "dry bulk" industry. I have done my share of world traveling and I have never seen a shortage of ships. There are always plenty of ships parked outside the port waiting/hoping for a charter. If there was a temporary shortage, it is going to be cured by the severe recession in bound to the US and a slow down in the US' debt ridden, over leveraged, “consumption based” economy. ( ref Consumer Sentiment: Is the Worst Yet To Come?) The ships that are being built or utilized currently are getting ready to be parked and transformed to barnacle rust collectors. Many of their owners will cash out and file bankruptcy (George Economou's Alpha shipping, again?).

There is a reason many Top Fools gave Dryships an Underperform. You can take your pick of article and realize how funny this company is.

Curious George
Nathan Vardi 02.25.08, 12:00 AM ET

http://www.forbes.com/forbes/2008/0225/095.html

World's Scariest Stock: DryShips
http://www.fool.com/investing/small-cap/2007/10/29/dryshi......

Dryships’ Debut Shows Speculation,
Liquidity Trumping Experience
“It was surreal. 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.’”
http://www.weedenco.com/welling/archive/sb/v07i04sblogo.asp

There is a major commodity bubble. When it pops the first to get taken out will be the leveraged, cash short and the stupid, which includes many in the "Drybulk" sector.

Many think “drybulk shipping” is a commodity play. It is a consumption/transportation play. As the consumption, spending, construction slows so will this sector. Many of these shippers were single digit stocks three years ago, they will return there once the bubble burst.

A highlight from: Curious George

"Who are my investors? Computer models, hedge funds and some institutions that go in and make $10 and get out." So much for consensus. DryShips has been operating with two employees (Economou, 54, and his internal auditor) since his chief financial officer quit in May, the second to split in three years. The company's fleet is managed by Cardiff, 70% owned by Economou, which gets more than $7 million a year for its troubles.

"A family business, this. Economou's two former wives own a total 15% of DryShips. Chryssoula Kandylidis, his sister, holds 30% of Cardiff Marine. With proceeds from its initial offering, DryShips bought six ships that had recently been picked up by Kandylidis. Five were sold at cost, but DryShips paid his sister a $3 million fee. Economou says she made very little money on the deal and bore great risk.

Kandylidis' son, Antonios Kandylidis, is also in this cozy network. The 30-year-old Antonios is the founder and largest shareholder in OceanFreight (nasdaq: OCNF - news - people ), which raised $218 million when it went public on the Nasdaq last year. Cardiff helped OceanFreight pick up its first dry-bulk vessels, helps manage that fleet and shares office space with OceanFreight.

A rocky maiden voyage. OceanFreight had to clarify its reporting in October, announcing third-quarter earnings per share were really 7 cents as opposed to the 11 cents it had advertised a day earlier. In December Antonios fired his chief executive, who says he intends to sue for wrongful termination. Then OceanFreight's chief financial officer quit; Antonios took over both the executive roles. Within days of the fuss OceanFreight announced it was buying the first of two tankers privately owned by Economou for $112 million."

Of interest also many dry bulk shippers are unloading shares on the stupid:

Secondary Offerings, Debt, and Defaults

Minyanville Professor David Nelson and Minyan Peter were talking about secondary offerings today. Let's take a look.

Professor Nelson: Shipping Secondaries

One by one the Dry Bulk Shippers are reporting blow out quarters. However, another pattern seems to be developing under the surface. Shortly after reporting and getting a big bump from the EPS reports, they've been announcing secondary's. Last week it was TBS International (TBSI) and this morning it's Genko Shipping (GNK).

Report this Post 6 Replies
Member Avatar Tastylunch (29.27) Submitted: 6/19/2008 5:43:48 AM
Recs: 7

Abandon Ship! Abandon Ship! CEOs and Board Members first!

Member Avatar zygnoda (27.21) Submitted: 6/28/2008 1:57:51 AM
Recs: 1

You deserve ten recs for that one.

Member Avatar dwot (61.86) Submitted: 8/4/2008 6:19:55 PM
Recs: 0

I read that article where he said that Americans are...

Member Avatar luckynumber5 (41.46) Submitted: 8/13/2008 10:04:36 PM
Recs: 0

You are exactly right. Humans are stupid. But a Human can be Diabolical. I love Dry Ships.

Member Avatar abitare (39.81) Submitted: 8/14/2008 6:17:07 PM
Recs: 0

luckynumber5,I love it too. I cannot wait to watch this 2 employee company return to a single digit or less....

Member Avatar cubanstockpicker (20.64) Submitted: 2/2/2009 3:43:12 PM
Recs: 3

I wonder when they will report a 50% reduction in workforce. "In a showing of commitment to the company DRYS, has fired 50% of their workforce. We have provided him/her with a milk carton and box. The releasing of the workforce will be done as organized and expeditiously as possible, say, after, work 5 pm?"The newly resized workforce will be faced with the daunting task of screwing over shareholders all by himself.

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