Yes, book value is still $14, but in this sector, book value is an accounting fiction. VLCCF 'values' their (2nd quarter) fleet of at $425M, they have $150M debt, so book value of their assets is $275M, or $11.50. Add in the ~2.50/share cash, and you have your $14M.
The 2Q fleet was 4xVLCC and 4xCapesize bulkers. Market values for those are somewhere around $25M per VLCC and $40M per Cape, or a total of $260M. Net of $150M debt, that's asset value of $4.60/share (add the cash, and you get $7.10). Much like the housing market, the major ship market has seen substantial erosion of asset values.
This is well illustrated by the Q3 sale of Hampstead, on which VLCCF expects to post a $13M loss. ie: that the sale price of $24.5M is $13M less than the book value. VLCCF is not "underwater," and the sale will net them $10M cash. You can infer from these data that Hampstead had a book value of probably $38-40M, actual value of $25M, and debt of $15M. The three remaining VLCCs are probably similar.
Good analysis. I would just add one point: Book Value of the fleet is original cost less depreciation capped by market value. Or, to explain it another way, the book value of the fleet has to be written down under GAAP if market is less than BV. Here that has not happened which means their auditors are going along with mgt's view that market value is above BV -- bad business practices.
Every stock that trades below NBV does so for one reason: Lack of Earnings. Since this co lost its long term shipping contracts that had prices well above spot market shippnig prices, the revenue loss (and thus profits) will be HUGE. That is why this stock traded today at a new low below $6 when it traded at $25 a year ago. $6 is not the bottom but it might be close.
Thanks for the reply keilers. What you say makes sense and the price movement is volatile. Hopefully we are forming a bottom with the volume and upswing today. They will find contracts for their vessels and that this stock is going to make a healthy recovery