After falling steeply post-split, the stock of DryShips Inc. (NASDAQ:DRYS) managed to halt its decline and posted gains of over 23% in the last trading session. The shipper is still down around 70% YTD.
DryShips after disclosing more updates related to its December 23 sale of over 22.5 million shares to Kalani Investments, the shares already recorded gains of over 23% in regular trading, and pre-market prices indicates strong green opening on Tuesday. The company reported that it sold more than 31 million shares to Kalani between December 23 and January 30 at an average price of around $6.30 per share for a total of $200 million.
CNBC’s Karen Finerman stated that Kalani Investments has sold the shares to the public. They haven’t ended that particularly clear. So if investors are buying it just because they think somebody bought $200 million worth of stock, it is not a good idea. At this point, either the exchanges or regulators should look at closing this stock.
The stock reverse resulted the stock price to come at $8.08, and now shares price is trading around $2.46. At the rate the shares price is plunging, another reverse split can be in horizon in the upcoming month or two. If it happens before March 11, it would be the fifth reverse split happening in less than a year. The shares were at a split-adjusted $60,000 per share before 2013 ended.
Before the recent reverse split occurred, DryShips diluted shareholders by over 52% in its latest deal with Kalani. After considering the reverse split, this would imply nearly 13.5 million shares were unpaid for DryShips. However, the reported deal still has nearly $70 million remaining. It would have meant dilution of additional 10 million shares after the reverse split, however it means nearly 20 million shares now.