Contributor, Benzinga
November 29, 2021
$1.95
-0.025[-1.27%]
Last update: 10:45AM (Delayed 15-Minutes)
Get Real Time Here
Open1.930Close-
Vol / Avg.5.847K / 32.833KMkt Cap14.531M
Day Range1.930 - 1.97052 Wk Range1.260 - 10.978

If you find yourself lost at sea — and assuming you don’t have the ability to send a distress signal to the U.S. Coast Guard — exposure to the elements might lead to delirium. And that circumstance could tempt you to consider taking a small sip of the vast waters around you.

However, the kidneys impose a cruel irony on this choice. Should you drink seawater, your bloodstream will then contain excessive salt. In order to remove this surplus, the kidneys flush the salt out through liquified waste, which then leads to dehydration. Thus, the better option is to pray for rain — or perhaps catch and eat a fish, which will provide less salty fluids.

Sure enough, the folks behind the upcoming spinoff of OceanPal Inc. might give off more Sunday revival vibes than those of a soon-to-be publicly traded corporation. On one hand, the debut couldn’t have come at a better time. A newly formed subsidiary under dry bulk shipping giant Diana Shipping Inc. (NYSE: DSX), OceanPal can certainly advantage the explosion of interest in global supply chains.

Join our IPO Newsletter for FREE

OceanPal IPO

Unlike a traditional initial public offering (IPO), OceanPal’s market debut did not represent the first time that the enterprise would go public. While the company is a newly formed subsidiary, technically, the asset reallocation comprises the spinoff previously traded under Diana Shipping. Therefore, rather than having an official entry on the IPO calendar, OceanPal instead had a distribution date of Nov. 29, 2021.

OceanPal Financial History

Because OceanPal is a newly formed entity, it’s difficult to ascertain the company’s future financial trajectory.

In addition, should the omicron variant be more transmissible but less deadly, it could be a blessing in disguise. That’s because omicron could become the dominant strain of the SARS-CoV-2 virus, ironically killing off the more lethal delta variant.

Therefore, assuming a moderately positive to best-case scenario regarding Covid, it’s possible for OceanPal to deliver attractive fiscal performances. Mainly, despite the pessimistic stories that dominate the headlines and airwaves, consumers around the world who have had enough of lockdowns and mitigation measures are ready to spend. So it’s not the demand-side picture that needs a touchup but rather the supply and logistics component.

As well, it’s quite possible that the supply chain backlog could affect society throughout much of 2022. With retailers urging consumers to buy their products as quickly and as early as possible, the implied message is that no one knows when this crisis within a crisis will end. Cynically, this frustrating development suits OP stock favorably.

Plus, let’s not forget that this unprecedented demand profile will likely boost OceanPal’s profitability. For instance, Diana Shipping’s revenue brought in $214.20 M, a clearly advantageous result compared to the operating loss of $7.2 million in 2020.

OceanPal Potential

Another factor to consider is the massive war chest that American consumers have accumulated. In an October 2021 article from Bloomberg, the publication stated that U.S. households collectively saved money to the tune of $2.7 trillion.

Since societal behaviors and patterns don’t change overnight, those funds are likely to move somewhere within the economy. Theoretically, such a scenario will likely bolster demand which is already at a blistering high, thus auguring well for OP stock and the shipping industry in general.

Nevertheless, at least a significant portion of OceanPal’s potential rests outside the areas of influence under management control. Should the omicron threat get out of control, retail sales and demand for goods and commodities could decline sharply, which would likely negatively affect OP stock.

With Covid- 19 cases on the decline in many parts of the U.S., OceanPal might have a bullish future in months to come. However, going back to the shipwrecking analogy, investors must wait before determining whether the surrounding water is salted or fresh.

How to Buy OceanPal IPO (OP) Stock

As a spinoff rather than a true IPO, investors not already entitled to OceanPal shares must acquire the equity unit at the open, which is easy if you already know how to buy stocks. If not, just follow the steps below.

Step 1: Pick a brokerage.

Any reputable brokerage will allow you to buy OP stock. Therefore, take the time to research which best brokers cater directly to your needs.

Step 2: Decide how many shares you want.

While OP stock isn’t technically an IPO, it still carries the same risks of the unknown. Therefore, protect yourself with a balanced share count if you decide to participate in the spinoff.

Step 3: Choose your order type.

Before investing, learn these market concepts.

  • Bid: The buyer’s best offer for a stock.
  • Ask: The seller’s lowest acceptable price.
  • Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
  • Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
  • Market order: Market orders guarantee fulfillment but only at the current rate.
  • Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
  • Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.

Step 4: Execute your trade.

Follow these steps to execute a market order:

  1. Select your action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or Sell) button.

Follow the same sequence for limit orders (but include your execution price).

Spun Off Into Ambiguous Waters

Absent the COVID-19 pandemic, the demand backlog for various goods and commodities should be a massive tailwind for OP stock. However, many uncertainties await clarification, which may dampen OceanPal’s future.

Frequently Asked Questions

Q

Whst is OceanPal?

A

OceanPal is a global provider of shipping transportation services specializing in vessels.

Join our IPO Newsletter for FREE

About Joshua Enomoto

His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.