DryShips Inc. (NASDAQ:DRYS) reported that it will announce its report for 4Q2016 after the market close on February 7, 2017. The company’s stock has turned a specialist in losing money for investors. Management has not let down, instead the consistent drop in stock price seems to have enforced another reverse stock split, that is, the fourth in almost a year. It is astounding to envisage the magnitude of loss that investors have comprehended over the past year.
The recent reverse stock split, 1-for-8, gets the total unpaid shares to around 9 million. It has the prospect to create additional concerns for the investors as the base is becoming very thin. After the next reverse split, it is important to analyze what will be the action plan if the stock price persists to decline and another reverse split is required.
Since then, the market has witnessed two more similar actions and there seems no end in sight. Prevailing price of over $5 may fail to hold as the business fundamentals are shaky and the investors as well as market have lost their confidence in the company’s management. There is a lack of trust and it might not be incorrect to conclude that some investors consider the management is merely thinking of their end. Investors have been cured abysmally.
Two separate submissions were filed on January 20, 2017. Both these submissions were of share sales to Kalani Investments. This submission showcases that as many as 78.3 million shares were released to the investment firm between December 23, 2016 and January 20, 2017. The stock price is declining and the management doesn’t have the similar status it had a few years ago. These shareholders will surely need guarantees about the safety of their investment.
After the gains of over 105% in the last trading session, the market cap of DryShips stands at 84.23 million.