DryShips, Inc. (DRYS)

Okay, it's time I finally entered a pitch for this stock. I initially made this pick as a result of TMFOtter's pitch - but since I'm getting absolutely slaughtered so far (score well below -500, and getting worse lately as of this writing) I thought Fools might want to know why I haven't ended the pain yet.

Here's a little example of why:

Economou says DryShips' management owns 47% of its shares and that helps generate enough cash flow.

Huh? How, exactly, does the fact that management owns shares help generate cash flow? Silly me, I guess I always thought cash flow was generated by the business - you know, shipping stuff. Think the ships, or the people who hire the ships, care who owns the shares?

But it goes on.

"We do not intend to sell shares," he said. This means the company can put a big part of equity back into buying vessels. Economou added: "We can deliver more money for every dollar invested in the company."

Okay, I like to think I'm a relatively bright guy, but I'm left scratching my head here. How does not selling shares translate into more equity with which to buy more ships? If management sells shares, or doesn't, the same amount of equity remains within the company. Of course selling shares in a secondary offering will result in more equity with which to buy ships, but that's not what he's saying - he's saying not selling shares translates into more equity. I need some Dramamine, because my head feels like it's spinning from trying to understand this.

I could end there, but I won't.

During the summer of 2006, when rates declined, DryShips' stock price fell to less than 9 a share, one-fifth of its current price near 54.

Economou says people's reaction to the volatility of the market was harder to deal with than the lower rate itself.

"When the market is low, people tend to panic," he said. "Investors and bankers are less willing to listen to the company." Borrowing money during the period was particularly difficult, he says.

Oh, now I get it. Never mind that rates declined at the time and the company's fortunes are closely tied to the spot market rates. We should all just be sheep and listen to the company!

DryShips is also looking for a chief financial officer from outside the company, but within the industry, he says. Its CFO resigned in May.

Pure speculation on my part, but maybe the CFO left because he got too confused all the time by trying to figure out what in the heck Economou was saying. I know I sure did.

Source for quotes: http://biz.yahoo.com/ibd/070713/newamer.html?.v=1