Adrian Wong
Value, CFA, research analyst, ETF investing

Star Bulk Carriers - Everyone Wins But You

Star Bulk Carriers Corp. (NASDAQ:SBLK) is a thinly traded micro-cap dry bulk shipping company currently worth around $30m, but will soon be worth over $100m after their backstopped equity offering (rights expiring 7/19/2013).

Buy and hold investors in Star Bulk's 2007 IPO have seen a devastating -96.26% return from 12/3/2007 to 6/28/2013. Exhibit 1 illustrates Star Bulk's fall, which is primarily caused by an oversupply of dry bulk ships made far worse by the Great Recession.

(click to enlarge)

Under pressure from lenders, Star Bulk was forced to raise equity through a backstopped equity offering to prevent bankruptcy. Existing or soon-to-be common shareholders will not profit as the dry bulk ship oversupply has not abated and a possible

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