DryShips (DRYS) Stock: Is There Still Hope?

DryShips Inc. (NASDAQ: DRYS)

DryShips has had an incredibly tough time in the market since the story broke on Monday about the company lying to the SEC and investors. Unfortunately, today is yet another day of declines on the stock as investors wait to see just how damning these accusations turn out to be. Below, we’ll talk about what we’re seeing from DRYS today, the scandal that started the fall, and what investors should be watching for ahead.

What We’re Seeing From DRYS Today

As mentioned above, DryShips is having an incredibly rough time in the market as of late. In fact, since Monday, when the story broke about lies to investors and the Securities and Exchange Commission, the stock has been falling. Unfortunately, today we’re seeing a continuation of the same.

When the market opened, DRYS was already trading slightly in the red. From there, we saw a mad dash toward the bottom, sending the stock further and further into the abyss. At the moment (10:06). DRYS is trading at $4.20 per share after a loss of $0.28 per share (6.25%) thus far today.

The Scandal That Sent The Stock Downward

Monday was an incredibly rough day for DryShips. Unfortunately for the company, serious allegations broke that could be tracked all the way up to the company’s CEO. The company has allegedly been lying to the Securities and Exchange Commission, leading to multiple misrepresented 6-K filings. According to the allegations, this was done through the use of Panama Paper proxies and corrupt Canadian officials.

This isn’t the first time the company has been in trouble in the eyes of investors, but it is definitely the worst time. You see, DRYS has experienced volatility in the past, but that’s generally from actions like reverse stock splits and dillutive offerings. The idea that the company has lied to the SEC, and therefore to its investors, is a heavy hitting one that brings a whole new level of uncertainty to the stock.

Is There A Recovery In Sight?

If you’re an investor in DRYS, you may be hoping that all of the noise surrounding this issue dies out, and that the stock starts to eventually perform as it did in the past. While I wouldn’t say that ALL hope is gone with regard to the long run outlook, chances are slim that the company will recover at any time soon.

At the end of the day, if these allegations prove to be true and the CEO at DRYS did use Panama Paper proxies and corrupt Canadian officials to lie to regulatory agencies and investors, the implications of such actions would be massive. I’m talking about the type of implications that could lead the company down the road to bankruptcy.

What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will be keeping a very close eye on DRYS. In particular, we’re interested in hearing the company’s response to these allegations. Considering that it’s been multiple days without a response, whatever they come up with will likely be interesting. Nonetheless, we’ll be watching the news closely and bringing it to you as it breaks!

Update: DryShips is making a run at the moment. The stock just made it to the green. We are searching for news that correlates with the movement and will update you as soon as we dig it up. This could get very interesting very quickly! Looks like a short squeeze.

Never Miss The News Again

Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!

Subscribe Today!

* indicates required

[Image Courtesy of Flickr]

Leave a Comment