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If You Invested $1,000 In Castor Maritime Stock One Year Ago, Here's How Much You'd Have Now

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If You Invested $1,000 In Castor Maritime Stock One Year Ago, Here's How Much You'd Have Now

Investors who have owned stocks in the past year have generally experienced some big gains. But there is no question some big-name stocks performed better than others along the way.

Castor’s Wild Run: One company that has been a rollercoaster investment in the past year has been dry bulk shipper Castor Maritime Inc (NASDAQ: CTRM).

Dry bulk shipping stocks have been brutal investments over the past decade, and Castor Maritime is no exception. Since the stock first listed on the Nasdaq in February 2019, shares are down 91.6% overall in just over two years. In the past year alone, Castor’s share count has also exploded by more than 9,000%, including the sale of 192.3 million shares in April. The company has acquired 11 vessels so far in 2021 to build up its fleet, but investors are paying a heavy price for those acquisitions.

In 2019, Castor generated a $1 million net profit on $5.9 million in revenue. In 2020, revenue more than doubled to $12.4 million, but the company swung to a net loss of $1.7 million.

At the beginning of 2020, Castor shares were trading at $1.86. By the beginning of March, the stock was down to 85 cents as news of the coronavirus spreading in China prompted concerns about a U.S. pandemic. On March 23, Castor shares dropped all the way down to 48 cents in intraday trading. While the overall market bottomed around that time, Castor shares still had a long way to fall.

The stock recovered to as high as $1.08 in late March amid a broad market rally, but the bottom fell out at that point. In September, Castor reported an updated count of 131,212,376 shares outstanding, up from just 9,859,042 shares outstanding in the previous quarter.

Castor hit its all-time low of 11 cents per share shortly thereafter.

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Castor In 2021, Beyond: Fortunately for Castor investors the stock was thrown a surprising life preserver in January 2021. With Castor still trading under 20 cents per share, Reddit’s WallStreetBets community orchestrated a coordinated buying campaign in the stock as part of a targeted short squeeze effort.

The short squeeze sent the stock skyrocketing to as high as $1.95 in early February. Since the dust has settled on the short squeeze, Castor shares are now back down to around 42 cents.

Castor investors who cashed out during the height of the squeeze were completely bailed out of the catastrophic losses they would have otherwise endured during the 2020 collapse in the stock.

Unfortunately, Castor investors who held on for the long-term based on optimism that rising Baltic Dry Index prices would offset the company’s aggressive dilution are now back underwater. In fact, $1,000 in Castor stock bought on May 11, 2020 would be worth about $594 today.

Looking ahead, Castor will need to show investors that its fleet expansion will help the company put up top- and bottom-line growth numbers that justify the massive dilution the company has subjected them to in the past year. Investors should also anticipate a reverse stock split at some point so the stock can maintain its Nasdaq listing, a phenomenon that is all too familiar for dry bulk shipping investors over the past 10 years.

 

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