DryShips Market Cap Changes After ATM Offering Completed (DRYS)

DryShips Inc. (NASDAQ: DRYS) is seeing a surge of interest this morning after the company said it had completed its “ATM” financing of some $475 million in gross proceeds.  Merrill Lynch acted as sales agent in the offering.  This will have ramifications for traders on Friday and beyond, particularly on the market capitalization rate.

The company now has approximately 257,645,000 common shares outstanding now that the offering is complete, which would give it an implied market cap of $1.813 billion based on yesterday’s $7.04 close.  That would be a far larger market cap on a fully diluted basis than the number that the public financial websites are showing, yet that is closer to what the market cap was before the ATM offering was made public.  On May 7, shares were as high as $11.48 and closed at $10.04.

As the company noted, it has now raised almost $1 billion in capital in recent weeks and months, canceled about $2 billion in capital expenditures, repaid more than $600 million in debt, and obtained waivers for “a substantial portion” of its outstanding debt.  It also is working to obtain waivers on the rest of the loan facilities and is examining further balance sheet strengthening actions.

In short, the company has left the door open to further capital raising events ahead.  That is not definite and we have no word on whether more securities or assets would be sold, but that door does look as though it is still open.

Shares closed at $7.04 yesterday, and at 8:33 AM EST we have seen over 1.2 million shares trade hands with the last print up over 4% at $7.04.  As a reminder, its 52-week trading range is $2.72 to $101.11.

JON C. OGG
MAY 22, 2009