On Monday, DryShips said it had reached a settlement with one of its lenders, which will write off about 50% of what it’s owed after DryShips repaid $8.2 million and agreed to repay another $2 million. But DryShips remains in default on some $200 million of bank loans having not made payments on credit facilities that have matured. In the middle of the stock surge last week, Economou inked a deal to sell $20 million of preferred shares to Kalani Investments. Any investor who buys a dry bulk shipping stock is betting more on those balance sheets than how much a Capesize vessel is earning in a given day.

Even though they have real businesses, all the dry bulk shippers are micro-cap penny stocks and many of their balance sheets are in terrible shape after years of dilutive equity financings and recent tough times in the shipping market. DryShips has long been the poster boy for the kind of poor corporate governance that has dominated the dry bulk shipping sector since Economou brought these stocks to the Nasdaq.ĭryShips was once worth billions of dollars, making Economou a paper billionaire, but even as its stock soared last week it was never worth more than $50 million. “Who are my investors? Computer models, hedge funds and some institutions that go in and make $10 and get out,” Economou once told Forbes. The MIT-trained Economou has never taken what goes on in the stock market too seriously.

Economou had orchestrated a reverse stock split in DryShips’ shares at the start of November that reduced the number of outstanding shares dramatically, leading some to argue that the DryShips stock surge was either the result of a short squeeze or casino-like retail speculation that overwhelmed the thinly traded shipping stocks last week. It was Economou’s DryShips that had its shares surge by 1,500% following Donald Trump’s election win before plummeting back down to Earth. At the center of last week’s shipping stock madness was George Economou, the man who had initially led the Greek dry bulk shipping companies to list their companies on Nasdaq more than a decade ago.

Best micro cap stocks november 2016