So you changed your mind in just a couple of days.
Dry Shipping Markets: Overcapcity Builds
March 3, 2014
The dry bulk shipping market continues to see the fleet and orderbook grow. In January 2014, the dry bulk fleet grew by nearly 8 million deadweight tons (“dwt.”) from the end of December 2013, increasing 1.1% in the first month of 2014. The increase in January of 116 dry bulk vessels was spread across all dry bulk sectors, Handysize, Handymax, Panamax and Capesizes.
The orderbook ended December 2013 at 133.3 million dwt. or 1,656 vessels. By the end of January 2014, the orderbook for dry bulk increased to 139.0 million dwt. or 1,707 vessels. The increase in January 2014 represents a 4.3% in one month. Approximately, 9% of the December 2013 gross dry bulk fleet is due by year-end (including January 2014 contribution). All sectors of the dry bulk fleet are expected to materially increase in 2013. The growth of the dry bulk orderbook is a harbinger of challenges to come for the shipping market. The orderbook is now being ignored by analysts and shipowners/investors alike, as capital investment continues, while demand from steel and power plants trends lower.
The Chinese economy is slowing and we expect the impact to be reflected over time via lower shipping rates. The dry bulk shipping market will continue to remain under pressure as the orderbook over the next three years is delivered and beyond 2017 should the global economy experience slower growth. We do not expect central banks will be able to continue, at current level, their exceedingly strong accommodative monetary policies. As such, the dry bulk orderook may continue to pressure shipping rates for years to come. And, in so doing, the Chinese steel mills and power plants as well as other charterers will become “price takers”, a bad position for shipowners to end up becoming.
The question is, at what point do analysts and shipowners/investors come to this realization that the market will languish for years to come? And finally, what will be the action taken by those investors who entered the shipping markets, but who are really ”tourists”?
When the stock collapsed from over $3 to $1.15, the insiders have had chance to buy at this much lower price. Why haven't they bought shares?
Aug 22, 2012 GUTHRIE DONALD
10,000 Direct Purchase at $5.94 - $6.11 per share. 60,0002
Jul 25, 2012 BARROS PAULINO R
4,575 Direct Acquisition (Non Open Market) at $0 per share. N/A
May 24, 2012 BEEBE KEVIN L
15,000 Direct Purchase at $10.98 per share. 164,700
May 10, 2012 BEGEMAN GARY
7,500 Direct Purchase at $12.64 - $12.66 per share. 95,0002
May 9, 2012 GUTHRIE DONALD
5,000 Direct Purchase at $12.44 - $12.74 per share. 63,0002
See below he says the banks have cut loan quotas for "industrial, real estate and shipping sector."
The credit situation in China is definitely not optimistic. The previous RMB4000bn gov investment has not pushed China into a healthy growth pattern and now comes problems.
In the market longer tenor Chinese corporate bonds are trading wider and China CDS level is higher then Ireland now. Chinese banks are facing hard situations with higher risks in their existing loans and reducing profit brought by gradual marketization of interest rate. In fact they have started to cut loan quotas to industrial, real estate and shipping sector, which may cause economy driven force to become weaker. As we are now again in a credit shrinking period, it won't surprise me to see further down in China markets.
Jesus Christ, i didn't realize they are paying 9.5% for the 2016 Senior Unsecured notes due 2016. If they are rolling over with this $500 million senior notes due 2019, what is the percentage they are paying for those notes?
4:06 pm DryShips announces Ocean Rig UDW's proposed offering of $500 mln senior notes due 2019 (DRYS) : Co, and through its majority owned subsidiary, Ocean Rig UDW (ORIG), of offshore deepwater drilling services, announced that Ocean Rig intends, subject to market and other conditions, to offer $500 million in aggregate principal amount of senior notes due 2019 in a private offering within the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and to certain other persons outside of the United States in reliance on Regulation S under the Securities Act. Ocean Rig intends to use the net proceeds from the offering of the Notes, together with other available funds, to fund the repurchase or redemption of its 9.5% Senior Unsecured Notes due 2016, for which it is conducting a concurrent tender offer, and to pay related fees and expenses.
I didn't realize they had something coming due in 2016 so they are trying to extend it to 2019. This is like the democrats kicking the budget down the roa d but ballooning interest payments. WLT investors in equity did not take kindly to what they are trying to do....
This is not what happened with Walters Energy. As soon as they tried to do the same, the stock fell $1.50 because although the time the bonds come due is moved out, the banking analysts say they will have to pay HIGHER interest rates.
This looks bad. DRYS never pays off a loan but keeps extending it and paying more interest. Will this hurt the stock next week?
ATHENS, GREECE--(Marketwired - Mar 14, 2014) - DryShips Inc. (NASDAQ: DRYS) (the "Company" or "DryShips") a global provider of marine transportation services for drybulk and petroleum cargoes, and through its majority owned subsidiary, Ocean Rig UDW Inc. ("Ocean Rig"), of offshore deepwater drilling services, today announced that Ocean Rig intends, subject to market and other conditions, to offer $500 million in aggregate principal amount of senior notes due 2019 (the "Notes") in a private offering within the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to certain other persons outside of the United States in reliance on Regulation S under the Securities Act.
Ocean Rig intends to use the net proceeds from the offering of the Notes, together with other available funds, to fund the repurchase or redemption of its 9.5% Senior Unsecured Notes due 2016, for which it is conducting a concurrent tender offer, and to pay related fees and expenses.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes, nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale is unlawful. Any offer of the Notes will be made only by means of a private offering memorandum.
The Notes have not been, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements under the Securities Act.
DryShips Inc. Announces Ocean Rig UDW Inc.'s Proposed Offering of $500 Million Senior Notes Due 2019
Did anyone see this coming? They are trying to extend the other senior notes that is due in 2016. Isn't this similar to what WLT (Walter Energy) is doing with their debt payment due in 2014? Won't this pad more INTEREST payments that DRYS will have to pay for?
That is why the shippers have been selling off for 7 days after news after news coming from China as how bad things are. I think a Russian economic war will be the nail in the coffin for the emerging markets economy.
I am the #$%$ GOD of trading. I call myself the bottom fisher and always buy high and 2 months later the stock is 30% lower and then I keep silent in hopes people don't know I am stupid and #$%$ with Multiple personalities. They don't have to know I am unemployed and on welfare.
Note this guy has ALWAYS been wrong. He bought $4.44 on December 30th. He bought WLT stock on February 6 around $12.85 range and it is now $9.
This means this stock will now fall to under $3 guaranteed.