DryShips Inc. (NASDAQ: DRYS) is facing a down day and a down transportation sector. The company disclosed that it has obtained another credit waiver on its $230 million loan due December 1, 2010, but the real reason for the drop is that the company is once again heading back to investors for another securities sale.
The Greek shipping company has filed with the SEC to sell up to $350 million in common shares. While the general corporate purposes is the norm, DryShips needs more funds to go out and finish building two of the drilling rigs. If there is a routine pattern that has been seen from this company, it is the never-ending securities sales and capital raises.
The company has also received waivers on other loans. The company said it was in compliance on its debt and that it expects to comply with the original covenants that were placed on most of the company’s debt.
DryShips shares are trading lower by 4.5% at $4.22 on active trading this morning. At 11:00 AM EST there have been more than 7 million shares which have traded. Not bad considering that the average volume over the last 90-day period of about 9.07 million shares.
All of the slow bleeding that has been seen here is due to financing after financing. While the offerings are generally rather small, the company just needs to make a pledge here and get it out-of-the-way once and for all. It should just go raise $1 billion, list its goals for where it plans to use the funds across the business, and follow-up with the promise in writing that it will not go back asking for more funds for three years under any circumstances.
JON C. OGG
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