Cheering 4Q results and the share buyback plan?
Shares outstanding went from 62m to 80m+ from end-of-year 2010 to 2011. That's management diluting existing shareholders by over 30%. Management would have to buy back $20m in shares just to undo the damage it did to shareholders, let alone have it be accretive to earnings.
SBLK management is screwing existing shareholders by issuing shares (likely to themselves as stock-based comp) at the worst time - when shares are cheap. What's more is that they are proposing buying public shares at higher prices using company money - management wins, shareholders lose. Further adding insult to injury, you can't find a cash flow statement or statement of equity anywhere near SBLK's quarterly filings so that shareholders won't find out. Screw that.
At first I was happy SBLK cut its dividend, thinking "what prudence!" Now, I just want my money.
Shareholders wise enough to SBLK management's antics should avoid this stock like the plague. Bad shipping rates, management that would dilute shareholders in a heartbeat, no clarity on financial statements and worse still, positive spin out of management's crooked mouths - even at $0.95, SBLK isn't cheap enough.
Actually the increase in the amount of outstanding shares was not due to executive compensation.
They sold 16 million shares last summer for total proceeds of $28 million.
They used $20.5 million of that, along with $31 million in debt to buy the Capes Star Big blt. 1996, and the Star Mega blt. 1994, from members of the chairmans family.
They have fairly lucrative charters attached of an average $24,000 per day through August 2014, and November 2015.
They paid a higher than normal cash deposit because the Banks base their appraisal on the ships resale value alone with no accounting for the charters attached.
As you can see the two Capes that they took an impairment on were built in 1991.
Twenty one year old Capes are worth $9 million each. so the Big and Mega are now worth around $15 million each, about what the loan held against them is.
The ships will bring in about $60 million in revenue over the extent of the charters, and at the end of the charters, the ships will have reached the end of their useful lives.
to each his/her own...you could short a bunch at 97 cents now....and we'll see where it is in 18 months...go for it. (good luck)
recognizing that soft market conditions may in all likelihood continue in 2012, our Board of Directors has made a number of decisions that we believe may have a positive effect on our balance sheet, cash flow and shareholder value over the longer term... First, reflecting our view that the recent price of our common stock does not reflect our long term potential, we extended our $30 mln share repurchase plan until December 31, 2012. As of the date of this report, we purchased 319,413 shares at an average price of $0.98 per share... Second, we lowered our dividend for 4Q11 [70%] to $0.015 per share, from $0.05 enabling us to conserve cash during this weak market. Our intent is to continue rewarding our shareholders with a regular dividend and an attractive return without compromising our long term prospects."
FEB 15 2012 AT 6:00 P.M. CST. SBLK IS DOWN TO .92 AFTER HOURS. I JUST RESET MY STOP LOSS ORDER, HOWEVER THIS MAY BE A BUYING OPPORTUNITY. BUT NOW THERE IS BAD NEWS ON THE DIVIDEND TOO LINK:http://finance.yahoo.com/marketupdate/inplay#sblk...oops sorry for the caps I didn't expect this with that low P/E and previous dividend.
I was in at $1.03, $1.05 and $1.08 sold entire position at $1.19.. Then went against my own rule got back in before earnings report, at $1.09
First bleeder of the year for me. Out in AH at .96. This earnings report and dividend cut didn't come close to my expectations.
I am at about 85% cash holding jahyx, and small position in NRF. A lot of cash on the sidelines end of January. Been a great run for me from December to Feb. Waiting for a larger market correction. Check your S&P 500 chart.