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StreetSweeper: Odyssey Marine Is A 'Shipwreck'

StreetSweeper: Odyssey Marine Is A 'Shipwreck'

Shares of Odyssey Marine Exploration Inc (NASDAQ: OMEX) were little changed on Thursday despite The Street Sweeper's Sonya Colberg describing the company as a "shipwreck."

According to Colberg, the former shipwreck recovery company turned undersea mineral explorer is "playing sweet tunes designed to convince investors that the inevitable won't happen."

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Colberg offered seven reasons why investors should expect trouble ahead for the stock.

1. "Cash Poor:" Odyssey burns through around $4.3 million in cash per quarter and $17 million per year.

2. "Looming Dilution:" Odyssey's lender has been granted the right to convert every penny of debt outstanding into stock at $5 per share.

3. "Blame Game:" Odyssey has established a record of blaming others for their troubles.

4. "Most Assets Sold:" In exchange for cash and reduced debt obligations, Odyssey sold "most everything" ranging from its shipwreck database, recovered items and its headquarters.

5. "Extensive Stock Dilution:" A recent stock purchase deal of up to $101 million is in fact a debt restructuring deal with a "long string of conditions attached" including a conversion to stock that poses extensive dilution to shareholders.

6. "Stock Hype:" Stock promoters are active in hyping Odyssey's stock in multiple campaigns over the past few years.

7. "Familiar Recent Stock Action:" Finally, shares of Odyssey have gained on hype that the Mexican government could approve a permit application filed by the company. However, "nobody really knows" what the eventual outcome might be and the company "has historically struggled" with similar government regulations in the past.

Latest Ratings for OMEX

Feb 2013Lake StreetInitiates Coverage onBuy

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