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An Empty Rally? Shipping Stocks Make A Low Float Comeback

March 27, 2019 1:54 pm
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It was smooth sailing for a while, but extreme volatility has returned to shipping stocks. Big moves in several shipping stocks this week is likely due to their extremely low float. Ironically, the potential trigger for the volatility may have been a shipping stock that is no longer involved in the shipping business.

Unlikely Catalyst

This week’s biggest mover has been Hunter Maritime Acquisition Corp. (NASDAQ:HUNT), which was up by a staggering 916 percent on Monday and Tuesday before being halted Wednesday pending an information request by Nasdaq.

The only bit of recent news from the company happened March 21 when the company announced is completed a merger with NCF Wealth Holdings Limited and will be changing its name to NCF Wealth Holdings Limited and pivoting its business to financial technology in China.

Related Link: What To Know About The Latest And One Of The Most Extreme Low Float Stocks

The fact that Hunter Maritime will no longer be in the shipping business didn’t stop the stock’s big move from triggering rallies in other low-float shipping stocks on Wednesday as well.

  • Globus Maritime Ltd (NASDAQ:GLBS) was up 18.7 percent.
  • Pyxis Tankers Inc (NASDAQ:PXS) was up 6.3 percent.
  • Euroseas Ltd. (NASDAQ:ESEA) was up 5.3 percent.
  • TOP SHIPS Inc (NASDAQ:TOPS) was up 2.2 percent.
  • Pingtan Marine Enterprise Ltd (NASDAQ:PME) was up 4 percent.

Low Floats

It’s not the first time traders have witnesses extreme volatility in the shipping space.

Throughout late 2017 and 2018, floods of trading volume in the thinly-traded shipping group drove bouts of extremely volatility. Several of the stocks that have experienced the volatility, including Performance Shipping Inc (NASDAQ:DCIX), TOP SHIPS and DryShips Inc. (NASDAQ:DRYS) had previously undergone reverse stock splits that shrank their public floats to low levels. Here are a look at the floats of the shipping stocks experiencing volatility this week:

  • Hunter Maritime: 205,200 shares.
  • Globus Maritime: 1.52 million shares.
  • Pyxis: 3.63 million shares.
  • Euroseas: 1.08 million shares.
  • TOP SHIPS: 17.3 million shares.
  • Pingtan Marine: 33 million shares.

Empty Rally?

Multiple representatives from these shipping companies told Benzinga there is no fundamental news driving the volatility.

“There has been no news to have caused this spike in Globus' share. As Globus has a very small market cap, the stock is more volatile than many of its peers,” a Globus spokesperson said.

A Pingtan spokesperson said the stock has not experienced extraordinary volume or price movements.

Assuming there is no fundamental news headlines in the next couple of days, traders can expect the current rally in shipping stocks to eventually fizzle out like previous spikes have done.

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