DryShips Inc. DRYS has announced its plans for a reverse stock split. The transportation company’s investors have also given their nod to the Array-for-25 reverse stock split at a special meeting. The company expects the reverse stock split to take effect from Mar ArrayArray, 20Array6. The company will trade on the exchange at a stock adjusted basis from the said date.
As a result of the reverse stock split, the number of outstanding shares of DryShips will be reduced from approximately 672 million to 26.9 million.
The company will not be issuing any fractional share. Shareholders holding fractional shares following the reverse stock split will receive cash in lieu of their fractional share holdings.
We remind investors that DryShips had received a delisting notice from Nasdaq in Apr 20Array5. However in October, the company got an additional Array80-day grace period to comply with the minimum requirement of its stock price touching $Array.00, by transferring the listing of its shares to the Nasdaq Capital Market.
The reverse stock split will undoubtedly boost the share price of DryShips from its current levels. Shares of the company have lost over 35% to date this year.
With the entire shipping industry under pressure due to low freight rates, overcapacity, a dearth of bank financing and the sluggishness in Chinese import of coal and iron ore, several companies are resorting to reverse stock splits to keep themselves listed on the exchange.
Recently, Scorpio Bulkers Inc. SALT, Star Bulk Carriers SBLK and Seanergy Maritime Holdings Corp. SHIP underwent reverse splits in an attempt to boost their stock prices and avoid delisting. What is worse is that the shipping industry, according to some market watchers, will possibly remain challenged in 20Array6, with chemical shipping freight rates likely to remain pressurized.
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