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DryShips Inc. (NASDAQ:DRYS) Trading Higher

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DryShips Inc. (NASDAQ:DRYS)
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DryShips Inc. (NASDAQ:DRYS)

DryShips Inc. (NASDAQ:DRYS) impressive run has seen it gain more than 30% in recent weeks, however the dry-bulk carrier took a hit in Thursday’s trading session. The stock fell 6.55% to end the trading session at $4.65 a share.

DryShips Inc. (NASDAQ:DRYS)

 

Improving Fundamentals

Renewed investor interest in DryShips follows a rise in a leading indicator for dry bulk shipping rates which has risen to three and half year highs. The rise is already revitalizing hope of a share price recovery for dry bulk carriers after coming under pressure for years.

DryShips Inc. (NASDAQ:DRYS) has felt the full effects of an industry downturn which forced it to carry out a number of reverse stock splits as it sought to ensure its stock price traded above the $1 a share mark. The stock is now trading around the $4 handle as it closes in on its 52-week high of $5.18 a share.

Since the start of the year, DryShips Inc. (NASDAQ:DRYS) has raised $720 million in new equity – mostly from hedge fund Kalani investments. While the debt has led to further shareholder dilution, the company has reiterated plans to use the funds to strengthen its dry bulk business on the back of the ongoing recovery.

The company has already reached agreements for the acquisition of 17 ships with a value of $765 million. DryShips Inc. (NASDAQ:DRYS) plans to acquire 5 Kamsarmax dry bulkers, 4 Newcastlemax dry bulkers, 2 Aframax oil tankers, 1 large crude carrier, and 1 Suezmax oil tanker. Increasing freight shipping rates should have a positive impact on the company’s cashflows and strengthen sentiments on Wall Street.

Dividend Offer

In a bid to strengthen investor confidence further, the company’s board of directors has declared a cash dividend with respect to the quarter ending September 30, 2017.

DryShips is to pay out $2.5 million in dividends on or about November 14, 2017, to common shareholders of record as of October 27, 2017. The dividend amounts to about $0.023975 per share.

Separately, DryShips Inc. (NASDAQ:DRYS) has raised $100 million in gross proceeds from a previously announced rights offering of common shares. The proceeds include $99.2 million investment form Sierra Investment Inc.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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