DryShips Proves the Power of Consistent Investor Relations

By Nicolas Bornozis, President, Capital Link, Inc.

In light of the last articles’ focus on the potential for investor relations to add tangible value to public companies, we hope that you find this article detailing the public relations strategy of DryShips that led to remarkable success with regard to share price and valuation particularly compelling.

DryShips listed on the Nasdaq on February 3rd, 2005, following one of the most successful IPOs in shipping. The initial plan was to offer 7.1 million shares priced between $16 and $18 and raise $113.6 to $127.7 million. But the IPO was oversubscribed 8.1 times, and DryShips ultimately offered 14.95 million shares (including the green shoe clause) at $18 per share raising $269.1 million. The success of the DryShips IPO paved the road for a multitude of other offerings and planned offerings in the shipping industry, especially in the dry bulk sector.

From the very beginning, the DryShips committed itself to proactive and consistent investor relations. Several challenges first had to be addressed. Taking advantage of the additional capital raised through the IPO, DryShips embarked on a series of rapidly staged acquisitions, expanding its fleet within the first quarter of 2005 from six ships pre- IPO to a total of 27 vessel, in contrast to the 17 vessels initially envisioned. All this made it more complicated for investors and analysts to follow the company’s development and the earnings progression associated with such rapid growth.

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