>Why would we need to recalculate asset values when it is already expensed?
you are asking the wrong question
book value doesnt matter, market value does
so whats the market value of the ships vs their carrying cost (book value)
answer that and stfu on everything else
Since rumors of DRYS's takeover by Maersk is not realized, I was wondering who could be the real one.
EXM has biggest size of the fleet in the sector, and has 1/3 of Price/Book value, so it is more likely takeover candidate than others in the sector.
EXM managements are money losing incompetent idiots, while other like SB & GNK are making Ton of money.
That said, if they will lose money again this quarter, they better consider selling the company at around $14/share, for the sake of their share holders.
Just my dream???
Pre-Quintana EXM was actually very well managed. While other owners were paying top dollar for new boats, Panayotides was biding his time and making a ton of money by running old boats.
Then came the Quintana debacle. The balance sheet and income statement tell the outcome of THAT story.
But EXM wasn't the only company to get suckered by the siren call of shiny new boats at the peak of the market. GNK, too, gorged. The difference though was that EXM bought an existing on-the-water fleet, where GNK's deal involved some options that they could, and did, cancel (at the cost of $30m[?] or so).
So... Panayotides absolutely screwed up big time. The financial shukin' and jivin' last year may yet prove to be shrewd. He dealt himself a "bad hand", but given that he *has* that hand, he's playing it okay. He's still in the game.
Book value is figured as follows:
Take the purchase price of the vessels. Deduct from each depreciation based on a 25 year useful life. If the vessels was 3 years old when purchased, you would use 22 years for straight line depreciation for that particular vessel. If that vessel cost $100 million, the depreciation would be $13.63 million so far. Book value is therefore $86.37 million for that vessel. Fine as far as that goes. Except that the vessel is probably only worth have what was paid as vessel values have fallen dramatically over the past couple of years. So the book value of EXM is not a reflection of what the vessels, their only asset really, are worth.
Turns out that book value for shippers is the least useful piece of data which you can use. If anyone uses book value as a reason for being in EXM, RUN, don't walk, away from them. They have proven beyond a shadow of a doubt that they don't have the first clue about shipping, ship values, or financials. Seriously, it is the worst measure, completely worthless, totally irrelavant and only serves to show the lack of research which has gone before. EVEN if it is in a list of reasons, it's a huge red flag. Run away!!!