Today it took just 65k shares sold at opening to dump the stock 9% down to 0.90.
This stock is now caught in a classic DEATH SPIRAL and all because of its strategy.
Here's the rationale: A. FREE gets dragged down by any declines in the wider market based on its beta. B. FREE gets dragged down by any decline in the BDI or BHSI because it confirms to the institutions that its too risky to have such a high level of spot market exposure. C. FREE doesn't benefit from any rise in the BDI or BHSI, because institutions don't know what the spot markets will look like next week, let alone next 1-3 months.
RESULT: FREE keeps ratcheting downwards.
Something drastic needs to change. Expecting a reverse split to be enough of a change is just naive and daft...it will work against FREE.
A shift in strategy DOESN'T HAVE TO BE PERMANENT. It could just be temporary to help stabilise the stock and get it back on track attracting better support from institutions including banks.
This stock now has $0.55 written all over it. IF YOU DON'T LIKE THE SOUND OF THAT, WRITE TO THE MANAGEMENT AND ASK THEM TO REVIEW THEIR STRATEGY BASED ON THE FACTS:
Since Sep 2009, this stock is down over 60%. Other shipping stocks are down 20-30%. The wider markets are flat / slightly up.
Since 2006, this stock has dropped from $5.50 to $0.90...the wider markets are down far less.
The market values this company significantly less than its break up value ($1.75-2.00)...in other words the market is saying that this management is at more risk of destroying value than creating it...HOW'S THAT FOR CONFIDENCE IN THE MANAGEMENT?
good statement. although the foolish have ears and hear not and eyes and see not. the wise man knows he is foolish and the foolish have their heads in the clouds. where as the wise , their feet are on the ground.
Well, Oh Wise One! That call was two and a half months ago. I am currently on the sidelines. I have explained a number of times here that buy and sell signals are available many times during a year and by using them you can systematically accumulate shares. I am not a buy and holder.
i've been observing many comments on that the company should reevaluate its chartering strategy and mitigate risk by taking on longer time charters... Has it occured to anyone that besides managements unwilliningness to do so there could also be inability? Average age of the fleet is 15 years... Especially for the two handies built in the early 80's i find it very hard for a first class charterer to risk his precious shipments for a period of longer than 6 mos... I don't know if that's the case but sounds logical... Should it be the case however things seem very bad for the company...unless off course spot rates go up significantly...