George Economou’s DryShips has announced a 1-for-5 reverse stock split of the company’s shares effective June 22, its fourth reverse split this year.
The news sent DryShips shares plunging to new lows down 32% to $1.19.
Last month, several US national securities law firms commenced investigations looking into potential securities fraud at the company, focusing on whether DryShips and its executives violated federal securities laws by failing to disclose material non-public information. The law firms cite a series of stock sales worth more than $500m in November 2016 and the sale of stock to Kalani Investments, which then sold the stock to “small investors”.
This latest reverse stock split will reduce the number of issued and outstanding common shares to around 4.8 million shares.
DryShips shares are down over 65% in the last month alone, and have dropped 99.85% since the beginning of the year.