Supramax player Eagle Bulk Shipping, which trades in New York under the stock name EGLE, saw its share price nosedive 25.1% today, largely on the back of a very negative report on the Seeking Alpha site penned by J Mintzmyer, which talked about how Eagle Shipping’s “90% dilution will drive over 80% downside”.
Mintzmyer wrote that the recent gains for Eagle Shipping, which narrowly avoided bankruptcy a couple of weeks ago, are thanks to “misguided retail buying, spurred on by Internet pumps and day traders.” Mintzmyer’s ‘pump’ assertions were also voiced by a number of Twitter users.
Shares had opened higher after Goldentree Asset Management reported an 18.3% active stake in the company as of March 30.
Speaking with Splash just ahead of close of trading in New York today Mintzmyer suggested both Paragon Shipping and Seanergy Maritime were also subject to similar stock manipulation plays at the moment.
Mintzmyer is president of Mintzmyer Investments and no stranger to calling out what he sees as erroneous shipping stock plays – such as last month’s loan furor between two Navios companies.
“EGLE stock has been completely hijacked by daytraders and speculators who have zero idea of what they are actually buying,” Mintzmyer said, adding: “Roughly 80% of the current 38m shares are owned by institutions, leaving a minuscule free float of under 8m shares, making EGLE an easy target for day traders and/or pump and dump outfits.”
In May, Eagle will issue over 340m new shares, and likely conduct a reverse split, which should lead to a massive increase in the free float.
“There is similar manipulation going on with Seanergy Maritime and Paragon Shipping, which are both essentially worthless shells,” Mintzmyer warned.