12/5/13 Huge jump in shipping rates: BDI +151 (over 2100 now); Cape +4576; Pana +574; Supra +90
The four day average shipping rates are now Capesize $33,475/day, Panamax $14,912/day, Supramax $16,007/day. This is the largest daily increase I have ever seen in the BDI or in Capesize, and up there for the other two. If I remember correctly, the BDI is now higher than it got back during the October rise. Daily spot rates are now at levels that are in the black for shippers, in other words, in profitable territory again. This all bodes extremely well for DRYS today and going forward.
Though it could take a few days still, it is possible, with a little strength in the broader market today, that DRYS could even get to $4 today. It is likely to easily blow thru the $3.50 level. If shipping rates continue to rise, the $4 level will be breached soon, regardless, and DRYS will be headed towards the $6-$8 range. GLTA
Just in time for one Pan to come off of TC of $7500/day...should earn $14,912 /day on the spot.; On the other 26 Pans and Sups each $100 gain/day pushes an extra $1m in annual Voyage revenue to DRYS. There are 2 Capes coming off TC at $10,000/day and $11,500/day respectively....On spot those two ships would bring in an extra $44,000 per day or $16m annually with no change in operating expenses. My guess is that Voyage revenue is trending above $100m (Including Tankers) to $110m ...Up from $76m in 3Q and $57m in 2Q .How long can the Shipping part of DRYS be valued at zero in the price of DRYS?
Between the BDI surge and the ORIG dividends, the cash needs through 2014 (discussed on the CCs) are declining rapidly if not completely. This is the best explanation for the share issuance program being removed, no?
Now, GE must deal with the convertibles. If that is done in a shareholder friendly manner, things could move forward nicely. GE could institute a share repurchase program in 2015.
And with this morning's surprise announcement that selling of shares under the ATM offering is suspended for the time being, this removes that selling pressure overhanging the stock, making it all the more clear for the stock's next run higher. This too is great news for shareholders, great news! GLTA