DRYS adopts antitakeover provisions

[dn4911]

DRYS shareholders approved a poison pill provision at its shareholders meeting of January 16th, 2008. The provision was NOT announced by the Company and as far as I can tell has not been picked up by any of the media. I found the provision in an SEC filing made on January 18th, available here at the company's web site: DryShips Inc. - Home Page

While DRYS did announce that it authorized the issuance of additional preferred and common stock, they never mentioned this provision.

I am surprised that no one has picked up on this.

As a shareholder it is pretty bad when you have to read the SEC to find out what is going on. Given the current low valuation of DRYS I understand why they did it. On the other hand, as a shareholder I wouldn't mind in the least of someone would come along and bid the stock up to the market value of its ships!

The following BS is part of the provision that was adopted.

Come on media, why aren't you finding this stuff?

Certain Anti-Takeover Effects

The Rights approved by the board of directors are designed to protect and maximize the value of the Company’s securities in the event of an unsolicited attempt by an acquirer to take over the Company in a manner or on terms notapproved by the board of directors. Takeover attempts may include coercive tactics, which deprive the Company’s board of directors and its shareholders of a meaningful chance to determine the Company’s future. The Rights have been declared by the board of directors in order to deter such tactics, as they unfairly pressure shareholders and may deprive them of the full value of their shares.

[Gary]

I don't know what is up with DRYS dn, but they could very well be a takeover candidate. However with falling stock prices I am sure there are many companies that start to look quite attractive.

Their biggest weakness is their liquidity which is poor when looking at the Current and Quick asset to liability ratios. Probably why dividends have been low when compared to someone like Diana Shipping. These numbers can be fairly meaningless (as long as income remains high) however if some of their assets become idle for a period of time, then it can become cash crunch time for them. Also without issuing new stock they don't have any real cash reserves which to fend off a well financed or more financially stable suitor.

In normal businees circles, these numbers would raise alarms to creditors.
Current Ratio (MRQ) 0.57
Quick Ratio (MRQ) 0.55

George Economou has always pitched their stock for it's growth value vs dividend value. It's a good sales pitch as long it holds true.

[dn4911]

Jan 4th 2008 - PRGN adopted practically identical antitakeover plan as DRYS did a few weeks later. These Greek shippers probably all have the same attorney. At least Paragon had the decency to issue a press release.