DryShips Soars 1,500% Amid Epic Short Squeeze

(This story has been updated to reflect DRYS closing price.)

DryShips (DRYS)  soared some 70% in Tuesday trading and has risen some 1,500% over the past week as one of the most spectacular short squeezes the market has witnessed in a long time grips this unique investment vehicle.

DryShips shares jumped 70.3% to $73 Tuesday on a huge volume surge. More than 10 million shares changed hands  -- some 20 times the stock's average daily volume of less than 500,000. DRYS had been as high as $102 earlier in the session and is up from just $4.56 a share at last Tuesday's close.

It's a remarkable turn of events for a stock that was trading just above $1 a share as recently as August. However, quite a lot has transpired since this unusual stock hit its summer lows.

DryShips undertook a 1-for-4 reverse split when the stock was trading at $1 a share, then engineered a 1-for-15 reverse split at the start of November. As a result, there were just over 1 million shares of the stock in the public float, opening the door for exactly what's happened now -- a short squeeze of dramatic proportions. According to the website ShortSqueeze.com, 1.7 million shares of DryShips were in short sellers' hands as of October's end, up from just about 300,000 shares six months ago.

That isn't to say DryShips' rally is purely a function of the short-sellers market. While it is largely that, bets on the direction of overseas-shipping pricing have expanded sharply since last week's U.S. presidential election.

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