Top Ships Inc (NASDAQ: TOPS) is having an overwhelmingly strong start in the pre-market this morning, and for good reason. The company issued a press release that explained changes to its strategy with regard to capital raising as well as other developments. Of course, this led to excitement among investors, sending the stock screaming for the top. Today, we’ll talk about the news, what we’re seeing from TOPS, and what we’ll be watching for ahead.
TOPS Announces Changes To Capital Raise Strategy
As mentioned above, Top Ships is having an overwhelmingly strong start to the trading session this morning after announcing that it has changed its capital raising strategy as well as pointing out other developments that investors have been tracking. In the release, TOPS announced that for the next 12 months, it does not intend to conduct any offerings that include variable priced securities or issue any further shares under the equity line offering. The company also announced that Race Navigation does not intend to convert any of its 1.25 million warrants pursuant to a standstill agreement with the company.
In the release, the company also outlined several other corporate developments that have taken place in recent months. However, none of these were recent news and all of the information was already made public. To get some reminders, click here and read the press release. In a statement, Evangelos Pistiolis, President, CEO, and director at TOPS, had the following to offer:
Our 8th vessel, which is 50% owned by TOPS, was successfully delivered from Hyundai and commenced its time charter employment with a high quality counterparty. The construction of all remaining 6 vessels is progressing according to schedule.
Following the delivery of the remaining 6 of our newbuilding vessels, our tanker fleet will have an average age of 2 years and will consist of 14 high specification newbuilding Product and Crude Oil tankers. All of our 14 newbuilding tankers are fitted with Ballast Water Treatment Systems. Three of our newbuilding tankers, 1 MR and 2 Suezmaxes, will be fitted with scrubbers, a technical feature that only a very small portion of the world tanker fleet has installed. Two of our MR vessels will be scrubber ready.
In line with our chartering strategy to date, all vessels have medium to long term charter contract coverage, even before being delivered, and as of January 1st, 2018, total gross revenue backlog for the fixed charter period of operating vessels was about $155 million, increasing to about $172 million when adding the 50% of our joint venture vessels.
We are currently focused on ensuring that our shipbuilding program is adequately funded both from an equity and debt point of view and within the boundaries of our newly adopted capital raising corporate strategy.
We are also focused on closing the gap between our equity market capitalization and our net asset value in order to be in line with the remaining listed tanker companies.
Based on the last closing price of TOPS, we estimate that our shares trade at a 75% discount to our current net asset value placing us among the most undervalued tanker shipping stocks on NASDAQ
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. This particular case proved to be no different. With Top Ships announcing that at least for the next 12 months, its capital raising strategies will align with the interest of investors, investor excitement is pushing the stock for the top. As is almost always the case, our partners at Trade Ideas were the first to alert us to the gains. At the moment (7:52), TOPS is trading at $0.26 per share after a gain of $0.08 per share or 48.49% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on TOPS. In particular, we’re interested in following the company through the next year as interests continue to align with investors. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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