DRYS Update

Yeah you are most likely right.  I guess once the offering is complete we'll most likely hear about the final loan covenant being received.

Whomever that Bank is I hope DRYS pays them off first and never does business with them again.

DryShips Inc. (NASDAQ: DRYS) (the "Company" or "DryShips"), a global provider of maritime transportation services for drybulk cargoes and off-shore contract drilling oil services, announced today that on April 8, 2009, pursuant to the previously announced letter of award, its wholly owned subsidiary Ocean Rig ASA signed a 3-year employment contract with Petrobras for exploration drilling in the Black Sea for its semi-submersible rig, the Leiv Eiriksson. The contract is expected to commence in direct continuation from the current contract with Shell. The contract value is approximately USD 630 million, including an estimated 60 days of mobilization, disassembly and reassembly of the derrick structure, and an incentive bonus of 8%.

Looks like the ATM offering is over . . . ugh.  180 million shares now. 

What a kick in the nuts.  Not sure why that equates to the stock being up but it is today.  That is quite a denominator going forward.  I'm assuming / hoping that going forward the following pieces of news will be seen and seen soon:

• final waiver covenants (now that ATM is over and they have $500 million in cash don't see why this wouldn't happen)
• some RIG contracts.
• spin off

We shall see.  At least no more dilution. 

VH2,

I was thinking about that yesterday.

Normally DRYS has traded near or higher than GNK, at least since I have followed it..so I think the stock might be near 20 by now without this ATM bullsh!t.

The float pretty much tripled, so that and the negative implication from shorts I think the stock would be at 20 or higher.

I think I know George very well and he has always been cocky about how his stock fares against others like Diana and Genco and EXM, so I am 100% positive that he was FORCED into this "ATM" and it wasnt by choice from him.

Another reason I think he was forced, remember those warrants granted to related parties? They were priced at 30 and higher..that speaks volumes to me..why would George be ok giving warrants to related parties at such high levels if he wasnt fully confident the stock was worth that and more?

Without this dilution, with any move in the BDI the stock would probably be back to 40-50 but with this dilution it means more like 15-20...if that.

15-20 on a 6ish stock ain't bad.

Again I am dead wrong with this stock.  Still holding my shares but dead wrong.

I'm assuming we'll eventually see a pullback once the euphoria is over with this pig. 

Hopefully we get some covenant news soon . . . and then UDW news?  One can dream

Buy the rumor . . . sell the news.

DRYS always runs before earnings and tanks afterwards.  I am sure today into tomorrow will be no different.

VH2,

Pretty good report..lowered expenses and no more ATM. I really wish he hadnt done that, the stock would probably be close to 25-30 if he hadnt.

Earnings less one time expenses werent bad, locked in charters and the rig contract will improve..plenty to be bullish about going forward.

The RIG portion of this entity is really starting to shape up, the closer it gets to mid 2010 the greater the value.

I would love for him to say he is buying back 100M shares though.

Earnings report was nice . . . but man this quote by George pissed me off to no end. 

"DryShips is uniquely positioned among its shipping peers to go after distressed assets and drive the long awaited consolidation of the industry."

Ugh

Does George not realize that him growing the company to quick too fast is what got us in this mess to begin and why we are not sitting on 180 million shares . . . he needs to check himself for a bit.  Sit back, paydown some debt, work on the spinoff . . . then go after assets. 

We don't need to continue to grow now of all times.

That angered me.

Rest of report made me pretty happy (except for the bloated float of course).

Based off first quarter earnings of $47 million excluding one time items we are trading at 8x earnings . . . which is pretty good considering we are at the bottom of the shipping market and with UDW and the 4 rigs set to come.

Just wish George wouldn't but anymore assets!

Its not old news and I dont get it personally.

He is either going to buy someone or is wanting to have enough cash to afford the other two Cardiff rigs.

There must be a serious time deadline for him to pressure the stock like this right after finishing the last mess.

I dont like it..if I knew why I might, but now I have no idea as to why.

I sold all of my DRYS in the high 9's.  I'm out.  I am done with GE. 



If it gets low enough I might get back in but I just don't know what is going on.  I am tired of getting kicked in the nuts by him time and time again.

Made a nice profit off my shares I bought in the 3's.  Lost on my stuff much higher.  What a roller coaster.

Last time DRYS announced an offering it tanked big time.  Sure it was a different market then but I look for this to retreat to the $5's.  Maybe I'll take up a position then. 

Guess the goal is to get through the offering as quick as possible.

I want him to tell us what his purpose is?

Like they mentioned in earnings, he has enough liquidity and credit, so what is the money for?

It has to be for the other Cardiff rigs..has to be.

You are most likely right Wall.  Man GE sure has a way of ruining a rally.  If he had not announced this DRYS probably would have ran to $12 or $13 today.

Alas I am out.  I may look into buying back at lower levels but we'll see.  This is beginning to get a bit ridiculous.  The UDW assets are what I like . . . so that still appeals to me. 

It has to be for the other 2 rigs and to get bank waivers taken care of. i sold out all my drys friday morning @ 9.40 kicking myself for not pulling the trigger on 1/2 @ 11.30's the day before.

honestly his timing on this was terrible. drys woulda ran into the 12's for sure. i really dont like the atm offerings. selling more shares at a set price would have done shareholders and the company a world of good.

VH2 i was thinking the same thing $5 is where im gonna start looking for an entry. actually im gonna watch the sales daily and try to figure out how many could be the atm sales. i wish etrade allowed drys to be shorted or i had options activated. friday shorts had easy dinner on drys. monday should be another 10% down day for drys even with an up market.

It depends..

If that same Cape can be purchased for 60M then it isnt a bad deal..

yea but if that same Cape costs 60 M and you are already out 43 M b/c this cancellation fee, then you are inherently paying 103 M