(Drybulk shipping report updated with detail on Genco Shipping, Eagle Bulk Shipping and Excel Martime Carriers.)
ATHENS, Greece (TheStreet) -- DryShips (DRYS) traded sharply lower amid heavy volume Monday after the shipping company announced it would acquire a dozen oil tankers from a Korean shipbuilder.
 |
DryShips said it would buy the high-specification newbuilding oil tankers over the next three years for a price of around $770 million, including over $3 million per vessel in extra items.
>>DryShips Sets Rig Unit's Offering at $17.50
Six newbuilding Aframax tankers will be acquired by 2012; six Suezmax tankers will be acquired by 2013. Staggering the tanker deliveries will help DryShips take advantage of improving market conditions over the next few years, the company said. The announcement was made on Thursday, the last trading before a three-day market holiday. Investors reacted strongly Monday morning when trading resumed. DryShips shares plunged 7% to close at $5.55 on Monday. Nearly 28 million shares were in play at the closing bell, compared with their average daily trading volume of 22.4 million shares. The Guggenheim Shipping ETF (SEA), an exchange-traded fund that counts DryShips and rival Diana Shipping (DSX) as 5.1% of its total holdings, bid 0.4% lower to $27.83. DryShips said it made initial payments of $120 million against the oil tanker contracts using cash on hand. It intends to finance the remaining capital commitments, including delivery installments of about 70% of each vessel's price, with cash and bank debt. DryShips also said it intends to position the tanker investments for a spinoff or initial public offering, likely in 2011. "With OceanRig UDW's successful Norwegian offering, we have positioned OceanRig UDW to be a pure play in the ultra deepwater drilling sector with contracts and a balance sheet that is self-sustaining," said CEO George Economou. DryShips said earlier this month its wholly-owned Ocean Rig UDW planned to raise $500 million in a private offering.Select the service that is right for you!
COMPARE ALL SERVICESAction Alerts PLUS
TRY IT FREEJim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
Product Features:
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Dividend Stock Advisor
TRY IT FREENew! $49.95/yr
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Product Features:
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Stocks Under $10
TRY IT FREEDavid Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
Product Features:
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
- Weekly roundups
Real Money
TRY IT FREE24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
Product Features:
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
Real Money Pro
TRY IT FREEAll of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
Product Features:
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Options Profits
TRY IT FREEOur options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
Product Features:
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV
