DryShips Inc. (NASDAQ:DRYS) revealed on Friday that the Board of Directors had decided a reverse stock split with a ratio of 1:4, which was approved by investors in February.
Reverse Stock Split
The reverse stock split is expected to take effect on August 15. Every four shares will then be equivalent to one share, reducing the outstanding common shares to just abou 9.90 million from 39.75 million. Shareholders will not be entitled to receive fractional shares resulting from the reverse stock split. Instead, the fractional shares will be converted into cash payments. Consequently, those who wish to receive the converted fractional shares will get the equivalent cash payments of their respective fractional shares multiplied by the closing price of the stock on August 12.
Investors whose shares are held in the forms of certificates will be notified on or before the effect date by the American Stock Transfer & Trust Co. LLC, the exchange agent of DryShips, on how to exchange their current stock certificates for new ones that reflect the effects of the reverse stock split.
Investors whose shares are held through banks, brokers, and other nominees, on the other hand, do not need to take any necessary actions relating to the reverse stock split. The effect will immediately reflect on their accounts on or after the effect date.
Earlier in June, DryShips had closed the 5,000 Series C Convertible Preferred Shares registered direct offering. The net proceeds from the registered direct offering of about $5 million will be used for various corporate and operational expenses.
DryShips is expected to release its earnings report for the second quarter on Monday.
Meanwhile, when it issued its first quarter earnings report in May, DryShips had shown a net income of $55.40 million, which is equivalent to a basic and diluted earnings per share (EPS) of $2.05. The company ended the first quarter with cash, cash equivalents, and restricted cash of $5.74 million, which is significantly down sequentially from $15.03 million.