DRYS Stock Jumps 40% on the Back of Equity Investment
DryShips Inc. (NASDAQ:DRYS) was dead in the water, so to speak, or at least seemed so just a short week ago when news broke about the company’s alleged misleading of the U.S. Securities and Exchange Commission (SEC).
But this Tuesday, DRYS stock was able to rally by more than 32% in active pre-market trading, soaring as high as 42% in the early morning after the company announced an equity investment to the tune of $200.0 million.
Kalani Investments Ltd. bought 31.8 million shares of common DRYS stock between December 23, 2016 and January 30, 2017. The $200.0-million price tag on the transaction puts the shares’ value at $6.30 a piece. Over that time period, DryShips has had a rough go of it, sinking by 93%. (Source: “DryShips’ stock soars on heavy volume after $200 million equity investment,” MarketWatch, January 31, 2017.)
Obviously, Tuesday’s trading is a welcome change of pace for any DRYS stock enthusiast.
But it’s not all clear skies and blue waters for the beleaguered shipping company. The SEC filings scandal has yet to be fully resolved, seeing as how it only came to public light last week. The company is accused of using “Panama Paper” proxies and corrupt Canadian officials in order to hand over multiple false 6-K filings to the SEC.
And it doesn’t stop there. According to the allegations, the problems in the DryShips SEC filings run all the way to the top, with Dryships CEO George Economou being accused of having played an integral part in the alleged misdeeds.
This, of course, does not detract from Tuesday’s good news, nor does it dampen the 40%-plus surge in the Dryships stock price. The long-term effect of the investigation, however, could potentially rear its ugly head on DRYS stock in the future. Which is to say that one of the most volatile shares on the market just got even more unpredictable.
DryShips has never been an investment for the lighthearted, and Tuesday’s news about DRYS stock does little to change that.