George Economou’s Ocean Rig, which filed for Chapter 15 bankruptcy protection in March, has announced a 1 for 9,200 reverse stock split in an effort to prop up the company’s share price.
Reverse stock splits have been a regular occurrence at Economou’s Nasdaq-listed dry bulk outfit DryShips, which is now facing an SEC investigation and a wave of class action law suits over the issuing of shares to Kalani Investments, each issue followed by a reverse splits aimed to stem the drop in share price caused by the dilution from each issue.
Ocean Rig is taking the reverse stock split to another level however with the 1-9,200 ratio, a move certain to cause selling pressure and wild price swings.
DryShips shares were dealt with in brutal fashion by investors whenever a reverse split was announced, and Ocean Rig is set to suffer the same fate with shares set to open trading today around 40% lower than the price at the close of business Tuesday.
The reverse stock split will take effect at 5pm on September 21.
$ORIG LOLOLOL biggest reverse split EVER! 1 for 9200 on Sep 22nd
— Shane Blackmon (@shaneblackmon) September 19, 2017
— Juraj Ulicny (@UlicnyJuraj) September 19, 2017
— Brandie (@br4nd1e) September 20, 2017