DryShips Inc: Replacement F-3 Registration Statement Filed
Mar.20.17 | About: DryShips Inc. (DRYS) Get Alerts
Morningsidepark Morningsidepark§ Value, special situations, energy, commodities, shipping, long only
(556 followers) Summary
DryShips filed an F-3 registration statement for up to $2 billion of securities on Monday, March 20th, replacing the F-3 filed May 7, 2015 for $2 billion.
Per a review of DryShips press releases and SEC filings, it issued approximately $520 million in registered securities off the May 7, 2015 shelf.
DryShips filed a 6-K before the market open on March 17th disclosing that it had finally completed its $200 million issuance of common stock under a Prospectus Supplement.
In total, DryShips issued 114.9 million of shares at a $1.74 average price. As of March 20th, DryShips has 152 million shares outstanding trading at a $210 million intraday market.
DryShips Inc. (NASDAQ:DRYS) filed an F-3 registration statement for an unallocated mixed shelf of $2 billion in securities. This new F-3 registration replaces the outstanding $2 billion F-3 registration statement that was originally filed on May 7, 2015. Based on a review of DRYS presses releases and SEC filings from May 7, 2015 to March 20th 2017, the Company issued approximately $520 million in registered securities under the now replaced 2015 F-3. In substance therefore, DRYS is replacing a two year old F-3 with $1.48 billion remaining with a new F-3 for $2 billion (i.e. a $520 million increase) that has a three year shelf life.
Has anything materially changed since Friday that warrants an 18 - 20% price drop? Not really. DRYS could have issued a boatload of securities on Friday relative to its equity market capitalization and it can still issue a boatload of securities today. Current long's would be in a world of pain long before DRYS would issue any of the incremental securities above the $1.48 billion that remained available under the old F-3.
The filing reinforces the maxim that investors, long or short, need to be on their toes trading this stock. During Friday afternoon, when the stock had steadily faded off its intraday high after the good news that it had completed its $200 million equity offering under its Prospectus Supplement (more on that below) and the short-term trading indicators turned negative, I bailed out of my entire position. I was disappointed that the early morning pop in the stock was so slight and ephemeral. I thought it was trading heavy due to Economou's comments about acquisitions in the press release and the "rumors" about a TOP Ships acquisition. Better to reenter the stock at a lower price this week than hold over the weekend.
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