DryShips ignores the law suits, announces fifth reverse stock split this year

DryShips ignores the law suits, announces fifth reverse stock split this year

George Economou’s DryShips has announced a 1-7 reverse stock split as it continues to struggle to reverse a free fall in its share price. The move comes despite more than 10 law firms announcing class action law suits against the company since Friday, alleging it violated federal securities laws.

The firms accuse DryShips of making materially false and misleading statements, systemic stock-manipulation to artificially inflate the company’s share price and using an illegal capital-raising scheme issuing shares to Kalani Investments, who then sold the shares on the open market.

To counter the dilution caused by the share issues, DryShips has issued a series of reverse stock splits, all of which have sent the stock plummeting further.

DryShips said this latest reverse split will take effect at the opening of trading on July 21, reducing the number of issued and outstanding common shares to approximately 5.2 million.

Investors reacted by sending DryShips shares down 29.17% in after-hours trading to just $0.59. Shares had actually closed up 4.4% yesterday, partly based on an announcement regarding the class action law suits.

“DryShips and its management believe that the complaint is without merit and plan to vigorously defend themselves against the allegations,” the company stated.

Grant Rowles

Grant spent nine years at Informa Group based in London, Sydney, Hong Kong and Singapore. He gained strong management experience in publishing, conferences and awards schemes in the shipping and legal areas, working on a number of titles including Lloyd's List. In 2009 Grant joined Seatrade responsible for the commercial development of Seatrade’s Asia products. In 2012, with Sam Chambers, he co-founded Asia Shipping Media.

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3 Comments

  1. Avatar
    Frederick Yugo III
    July 19, 2017 at 4:27 pm

    Is it possible to lose over 99% on an “investment”?

  2. Avatar
    Dryship hater
    July 20, 2017 at 12:12 am

    Will continue to short it to zero. This CEO sucks should go to jail

  3. Avatar
    Knud Nielsen
    July 20, 2017 at 10:17 am

    It is crazy that this is allowed to happen and that Dryships can get away with it. It might not be criminal, but it is definitely unethical.