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DryShips, Inc. Message Board

  • bennta01 bennta01 Mar 20, 2013 10:22 AM Flag

    DRYS has too much debt, don't know how money will be made here.

    I would like anyone to tell me how they expect to make money on this stock. Their debt load far exceeds the value of their ships and ORIG. To make money on this stock the BDI would need to move up significantly and quickly.

    I have been making the case for Paragon (PRGN) because there is much more value there. If the BDI goes up 50% (which it likely will eventually) DRYS will still be struggling for survival while PRGN will likely be trading at 10X it current value.

    Paragon has positive equity now:

    Here are the ships owned by Paragon and the current, depressed market values:
    3 Handysize 2012/2012 value 22 million each= 66
    2008 Supramax 18
    2005 Supramax 15
    1999 Panamax 9 millionx3= 27
    2001 Panamax 12
    2006 Panamax 3x 20=60
    2009 Panamax 24
    Total ship value= 222 million
    16% interest in box ships= 21 million
    Cash= 25 million
    Total assets= 268 million
    Debt-195 million
    Current equity-73 million
    Current market cap-27 million

    A couple people said I am slightly overvaluing PRGN's assets, even if we reduce the equity by 10 or 20 million this stock is trading at half of equity.

    Add up the numbers (all the ships and ORIG stake) for DRYS then look at the debt and see where you end up.....

    Sentiment: Sell

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