I don't perceive debt accumulation as a burden to the investor. It's management's problem. This industry segment maintains its integrity due to its ability to pay a dividend. And it is management's responsibility to maintain the relationship. Ultimately it falls to the shareholders to decide upon management's decisions. So you know, if put to a vote, the direction I'll be casting my ballot.
I do recognize that a company will typically only pay a dividend when its expansion plans mature.
I have a thick skin. I get annoyed when posters are needlessly rude. If you have a constructive comment, fire away. You all obviously think I am out to lunch on the divy thing. That's fine. I guess I look at seaspan's pile of debt and wonder how they can manage a divy where genco can't. With 4.50 in earnings (sure, the outlook for earnings is unstable, but it isn't going lower--not by much anyway) you'd think the shareholders could get a little piece. Seaspan is valued at 80%ish of equity. Genco is closer to 40%...
WHY would they engage in an equity issue when they can accomplish the same objective (debt reduction) without going through the expense or dilution (of an equity issuance)?
You can prognosticate any number of possible alternative financing scenarios, but the company has signalled that it is NOT going to do a secondary. They could have sold stock to finance the recent fleet expansion. They chose not to do so. Instead, they raised funds through a convertible offering. And even THAT appears to have been structured to minimize the possibility of "predatory" conversions. That ought to provide a clue as to what the company thinks about a potential dilution.
So... if your investment strategy re: GNK is predicated on a stock issuance, you're probably going to be disappointed.
And the idea that one would engage in a dilutive stock issuance to FACILITATE a dividend issuance... well... good luck with that.
IMO, the stock will gradually move up to the low 20s once everyone becomes comfortable with the new financing arrangements, the existence of BALT as a component of GNK's earnings, etc. But it's going to get there by an expansion of the multiple offset by a decline in EPS.