I'm sure you all have seen this from Motely Fool. Can't see where anything has changed?
Eagle Bulk Shipping. This stock caught fire on Thursday, rocketing up more than 11%. But I’d chalk that up more to greater volatility since its 1-for-4 reverse stock split last month (a move it had to make to keep its Nasdaq listing)than any positive development for the company or the sector. That’s a bad sign in and of itself.
EGLE has a crushing debt load of $1.4 billion, with only about $28 million in cash. It posted a widening first-quarter loss of more than $17 million (compared to a $5.8 million loss for the same quarter last year). It also had a lot of expensive new ships delivered in the midst of the shipping glut.
With a market cap of $49 million (about the price of a single new “capesize” ship), EGLE closed at $3.11 on Thursday — when adjusted for the reverse split, that’s 71% below its 52-week high last July.
Bottom Line: It will be exceedingly difficult for management to right this foundering ship. As this story points out, another big challenge is short interest of more than 58% on this stock — more than six times higher than its closest peer in that regard. That means a lot of investors are betting on EGLE’s bankruptcy. I’d leave this shipping stock in port.