DryShips Announces Offering And Shippers Are Crashing Back To Earth

The clock appears to have struck midnight on the shipping fairytale that sent DryShips Inc. DRYS soaring more than 1,500 percent in roughly a week.

The company announced a registered direct offering to raise roughly $20 million. The company says the cash will be used to pay down some of its massive debt load. In addition to the $20 million, the company says it may receive up to an additional $80 million if all preferred warrants associated with the offering are exercised.

Yahoo Finance has DryShip’s current debt-to-equity ratio listed at 6,281.21. The company has issued three reverse stock splits this year to maintain its listing on the Nasdaq exchange and appears to have narrowly avoided bankruptcy.

DryShip shares resumed trading at 10:30 a.m. EST on Thursday after the Nasdaq halted them prior to Wednesday morning’s open. The stock resumed trading at around $51, down more than 37 percent.

DryShips is leading other overheated shipping stocks downward on Thursday as well. Diana Containerships Inc DCIX is down 5.9 percent, Euroseas Ltd. ESEA is down 34 percent and Globus Maritime Ltd GLBS is down 37.6 percent. Another hot stock, Eagle Bulk Shipping Inc EGLE, was down more than 25 percent at $6.81.

At least one name, Sin-Global Shipping America, Ltd. SINO is bucking the downward trend, trading up 21.5 percent.