There won't be any secondary. They are managing their growing cash pile quite well, and earnings will improve in Q3 and Q4. Q3 could break even for net income. Rockaway Belle will be delivered, next month, with much fanfare.
I used to like the company back in 2007 and early 2008 when it seemed thast TBS was finding a niche in the shipping market that was immune to the daily BDI spot price. I got very concerned that Royce began buying too many 1980 vintage vessels at relatively high prices that needed significant drydocking to meet TBS customer requirements. Also, in May 2008, TBS did a secondary at a time when the company was making huge profits & Royce cashed out 2 million shares. My guess was that he saw a downturn coming and knew they were at a peak. What bothered me the most was that in the second half of 2008 TBS kept buying vessels, did not consider cancelling the six-vessel newbuilds, and never hedged against a downturn in rates and volumes. Every other shipper has term charters for at least 50% of their fleet. TBS has almost none. If I was their lender, I would kicking myself for not leaning on TBS management on letting the market determine their cashflow. Royce is rich and is wearing blinders. My recommendation to Royce would be to sell or scrap at least 5-10 of the oldest vessels. Take the cash and pay down debt. It will reduce interest expenses, drydocking costs, and depreciation. All accretive to the bottom line. Instead, Royce WILL do a secondary & dilute the shareholders.
the only secondary I remember was somewhere around 50. Royce appeared to be a step ahead of the others who have been flooding the market with secondaries at these depressed levels..
Royce stated that the reason for the loss stemmed from his segment reacting slower to stimulus and improving conditions and he also stated that improving conditions where showing up in the current quarter.
White... have you ever liked this company?
White does seem to be over the top...writing as if HE KNOWS what the future holds for this company.
On the other hand, they have lost money, they do have considerably less cash than last year, and if we get a double dip down or renewed softness in the economy then he very well might be right!
I thought this company was pulling out so I started buying at just over $8. I don't plan on selling in the morning but apparently we will take a good hit UNLESS there is something in the conference call that indicates the 3rd quarter WILL BE PROFITABLE. We need to show that we are pulling out of the hole.
Let's hope we stay about 7 tomorrow!