Short term traders may have gotten caught with their pants down, and panic, and sell out at a loss, but other than the day to day up and down tics, this news about a possible 10-15% increase in the DRYS outstanding share count in order to secure additional capital if needed is actually positive news.
It affirms the likelihood that DRYS no longer needs to sell ORIG shares for cash flow, something the increased shipping rates have helped bring about. The DRYS selling of ORIG shares has been helping to hold back ORIG share price. Now that this is likely no longer a concern, this is consistent with the recent strength in ORIG shares, near a very significant breakout level on a beautiful chart bringing it to all time highs and a newly uptrending share price. ORIG shares are actually a strong buy right now, even more so as it breaks up thru the psychological $19 resistance level. As owner of 59% of ORIG, this further strengthens the DRYS financial position.
Additonally, ORIG has had 3 newbuild drill ships scheduled for delivery in 2013. In the last quarterly report, it was confirmed that the first had been delivered and was in transit to the drilling site where its charter would begin in November of this year. It is my understanding that such deep water drill ship daily charter rates are significantly higher than even Capesize rates. I wouldn't be surprised if at the upcoming quarterly report, the status of that one and the next two drill ships delivery and charter will be announced, giving ORIG 3 new significant sources of revenue in the coming months. Not only will this further increase the ORIG share price, great for DRYS, but may well be the catalyst for announcing a dividend, which would be even better for DRYS and their cashflow. This possibility may in fact be why in the Friday announcement, DRYS used phrases like "up to $200 million" and "sales of the common shares, if any".
Continued increases in shipping rates may make some/all unnecessary too.
It's absolutely VERY POSITIVE NEWS and after hours yesterday was a huge shake.....it's not an offering, as the shorts are stating.....it's a very well orchestrated release and GE is never so forthcoming and positive. He basically states, without saying it, that DRYS and ORIG are in great shape and this quarter is going to blow us away. Only fools will sell Monday and the wise will buy on any dips.
Yet another newly created kem60 id, hot off the press this one is...I have told you over and over i have all your id's, no matter when you make new ones. .kem60 posts, then responds trying to praise himself, or agree with his post..
kem60, I don't understand what you get out of this, oh...I forgot your NPD.... Disorder....You have all the symptoms, all symptoms match you perfectly, and you know it, as you should. The number one symptom is always trying to belittle people, even though you praise them in one response, but come right back with another id belittling the poster. That's the sickness of your disorder, I have told you I would send you money to get help, and I am 100% serious, I would. I know it must be hard going through life with NPD, always seeking praise, always trying to look smart....important. NPD has driven off all your family and friends, never were able to hold a job with NPD. Your only life is DRYS message board, play make believe all day & night. I will help you, if you will let me.
I am 100% serious on sending money for help.
Also: Note the reference to negotiations under way to refinance debt and extend terms. This would be a solidly positive for DRYS financials, and the announcing possible offering may be part of those negotiations to maximize their chances at even more favorable terms. For all we know, DRYS may want to put some of those funds in this rising shipping rate environment as they say into acquiring additional used ships rather than just paying debt by outdated terms. This news makes DRYS stronger financially, and gives them added flexibility to maximize the new, stronger shipping market.
I see this as positive news overall, and wouldn't be surprised to see the DRYS share price continuing higher in the very near future, whatever temporary drop in share price might occur Monday. It may just be a matter of hours even, or days or weeks, but DRYS will be going much higher. GLTA.
And: As another poster smartly noted a moment ago, DRYS is already expecting 4 new Ice Class Panamax ships, which as he correctly pointed out, command much higher daily rates when going the northern route, which is why there were designed. The northern route is seeing increased usage, and DRYS will be positioned beautifully to leverage that, while most of their competitors will not. These would be a great use of the new funds, if needed for such. Like I said, added flexibilty.
Strong buy/add, especially on any dips that may for instance occur on Monday morning.