Why Did DRYS Stock Gain 1500% in Five Days?
DryShips Inc. (NASDAQ:DRYS) stock had a wild ride on Tuesday, rising as high as 120% before curtailing to a (measly) 66% gain. Tuesday marked the second day in a row that DRYS stock had gone absolutely crazy with unbelievable gains. On Monday, it had finished with a 215% climb.
This is in large part due to the proposed debt restructuring and a rise in the Baltic Dry Index (BDIY), suggesting that demand for shipping capacity has started to increase. (Source: “Here’s Why DryShips Inc. Stock Continues to Explode Higher,” The Motley Fool, November 14, 2016.)
At final tally on Monday, the $12.00 stock in the morning had transformed into a $41.00 stock by day’s end. On Tuesday, DRYS stock continued in its mercurial ways, finishing at $71.26. In five days, DRYS stock went up 1500%. Naturally, this jump is not sustainable for the long term, but for a company that seemed dead and left for broke, suddenly rising from the grave to amass huge earnings in such a short time period is certainly powerful evidence to its resilience.
The key will be DryShips’ performance today. Will the company be able to carry this momentum onward to another banner day? Or will the stock finally fall back to earth?
It’s definitely been troubled waters for the shipping company since DRYS stock’s fall from a six-digit stock to a $4.00 price point. While this current wave of good fortune is great, it’ll take a long time before the company finds itself in the rarefied airs it once occupied in 2007 and 2008.
It’s also worth noting that the restructuring has not yet been confirmed. Which is to say, the company is in serious talks and proposals, but nothing is set in stone … yet.
Many see President-elect Donald Trump as a potential boon to the shipping business, as there is growing consensus that he will be a very business-friendly president (he’s got to be friendly at least some of the time, after all). The billionaire real estate mogul-turned-president has made promises on bringing back more blue-collar jobs, as well as investing in infrastructure, all which may bode well for DryShips future.