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Erik Gholtoghian  

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  • Ocean Rig: Will The Company Be Affected By Dryships Financial Situation? [View article]
    Profitable if you don't count billions in write downs. It is textbook Economou financial management.
    Sep 28, 2015. 11:26 PM | Likes Like |Link to Comment
  • Ocean Rig: Will The Company Be Affected By Dryships Financial Situation? [View article]
    Agreed, unless ORIG dupes more investors by selling even more shares to the market to pay off the debt. That is why stock investors have had to crush the stock, to force ORIG to either do something other than sell more shares.
    Sep 17, 2015. 02:00 PM | Likes Like |Link to Comment
  • Ocean Rig: Will The Company Be Affected By Dryships Financial Situation? [View article]
    Analysts are all forecasting that dayrates will be low, so much so that ORIG is expected to break even in 2017 and lose money in 2018. That is not good when you are the most highly leveraged driller out there.
    Sep 15, 2015. 01:14 PM | 1 Like Like |Link to Comment
  • Ocean Rig: Will The Company Be Affected By Dryships Financial Situation? [View article]
    Economou is the one who referred to them as dumb.
    Sep 14, 2015. 07:41 PM | Likes Like |Link to Comment
  • Ocean Rig: Will The Company Be Affected By Dryships Financial Situation? [View article]
    I made a tremendous amount of money as a Dryships long years ago, but have only been long for very brief periods of time since. Back then oil was much, much higher than now, and even then I was only writing very low risk puts not buying the shares themselves. I couldn't even get naked put positions to hold at all, so I eventually got out with tiny losses. This is fortunate because it has collapsed since then. I have almost never held a long position in ORIG. At the end of the day, everybody does what they want. I am just letting you know that buying ORIG or DRYS is a REAL crap shoot. I certainly wouldn't be overexposed for even a minute because you will get trapped. At most, it should be 1/60 of your portfolio. Good luck.
    Sep 14, 2015. 07:24 PM | Likes Like |Link to Comment
  • Ocean Rig: Will The Company Be Affected By Dryships Financial Situation? [View article]
    I enjoyed your reply. To clarify my comment about Economou and others overleveraging the oil industry, one only need look at drybulk. What happened to drybulk rates when tons of corporate debt was issued solely to buy drybulk ships? Rates collapsed and haven't come back. The more money that goes after a commodity, the cheaper it gets. When billions are borrowed to build drillships and tankers, the same thing happens. That is exactly what just happened to oil. Even Alan Greenspan has publicly stated that oil has changed fundamentally like never before. Pretending that no matter the circumstances oil will always rise doesn't work when Saudia Arabia is trying to get rid of its oil as fast as it can before electric cars permanently destroy the value forever.

    I'm no greenie; it is just reality that electric cars are increasing in numbers each day, not decreasing. Gasoline consumption has absolutely plunged off of a cliff since 2008 (when hybrids got popular).

    The other problem with ORIG in particular, which is much, much worse than any other driller, is that a guy who just robbed Dryships shareholders blind for 10 years owns and manages the company. If ORIG has cash, you can bet Economou will over-invest into more drillships to destroy the balance sheet. Back when dryships investors were optimistic that its balance sheet was getting better, Economou decided to overpay for dozens of ships, and even the ORIG company itself. Economou just recorded an $800 million impairment charge. If I was an ORIG shareholder feeling safe because ORIG has $800 million in cash, I would rethink who controls that money. It certainly isn't the shareholder.

    ORIG shareholders literally have to be the dumbest people on earth. The CEO just bankrupted the parent company into his own pocket, after diluting shares for years, and ORIG is doing the same thing, yet shareholders are asking Economou to take their money. LOL. He was right when he said Americans are the dumbest investors in the world. I actually solute him for his effort in taking money from people who don't deserve it.
    Sep 13, 2015. 10:44 PM | 3 Likes Like |Link to Comment
  • Ocean Rig: Will The Company Be Affected By Dryships Financial Situation? [View article]
    You are acting like not even a single cancellation is possible. Oil is 1/2 the price it was when most of the contracts were signed. If those leasing the rigs can only sell the oil for 50% of what they were forecasting, how do you suppose they will pay ORIG? The answer is they will try to borrow. That borrowing will actually act as further leverage of the oil industry, which will cause oil to fall even further. Goldman, and I, see oil falling to $20 per barrel at bottom. Can Ocean Rig survive $20/b oil? The market doesn't think so, or it wouldn't be down 85% over the past year. Just imagine what will happen to oil if the Fed raises rates at all. Higher rates will mean lower commodity prices, especially oil, and higher corporate borrowing costs.

    From the NY Times:

    "Offshore drilling has suffered from the overall oil market downdraft. Hercules Offshore, a leading shallow-water gulf driller, filed for bankruptcy this month and Fitch Ratings has suggested that more bankruptcies among offshore drillers may be coming soon.

    An oversupply of rigs is developing as contracts expire. Fitch recently estimated in a report that day rates for ultra-deepwater rigs, which have generally run between $400,000 to $600,000 in recent years, will come down to $325,000.

    “The market remains challenging, and we are in the midst of a significant downturn in offshore drilling,” Anthony Kandylidis, executive vice president of Ocean Rig, a leading drilling contractor, told analysts this month as he announced the suspension of the company’s dividend. “The recent volatility in the price of oil and increased availability of drilling units do not allow for a short-term market improvement.”

    Only five companies submitted 33 bids for 33 blocks spanning 190,000 acres of gulf waters in Wednesday’s auction, representing a sharp decline that reflects a growing consensus in the industry that the oil price is not going to recover anytime soon."
    Sep 11, 2015. 03:57 PM | 2 Likes Like |Link to Comment
  • Ocean Rig: Will The Company Be Affected By Dryships Financial Situation? [View article]
    The fact is that Economou sold 17 ships to himself! He has essentially liquidated the company before going bankrupt. If he liquidated after, the creditors would run the show. Dryships is very close to being delisted and moved to the pink sheets. If I had to guess, ORIG will go the same way. Economou will continue overleveraging it, causing oil to plunge, and then his private companies can pick up ORIG for 25 cents per share next year. Electric cars, hybrid cars, a slowing, depressed U.S. economy, improved oil exports out of Iran, and a greatly overleveraged oil industry is causing oil to hit historic lows for years to come. Refiners are the least at risk, but everybody else in the oil industry is going to get obliterated. Cash on the books is nothing when you have someone who knows how to legally destroy $800 million calling the shots. Investors will push ORIG shares down even lower to assure that no more dilutions will steal investor monies. Most of ORIG's cash only came in from duping more investors into a dilution, which will probably just finance more Economou private acquisitions. If Dryships goes bankrupt, it will have to sell the ORIG shares, which will probably crush the ORIG stock price.
    Sep 11, 2015. 02:36 PM | 2 Likes Like |Link to Comment
  • DryShips Could See A Short-Term Boost [View article]
    Dryships is very finicky. It falls tremendously when you feel it shouldn't, and it explodes upwards when you feel it shouldn't. The best approach is to use fundamental analysis, and this usually means using timing which goes against the crowd.

    It rewards true risk takers, amazingly efficiently. You cannot jump in and jump out with profits more than by chance. You have to ride out the storm, or you will get nothing. The algo-traders and others will make sure of it.
    May 20, 2014. 12:30 AM | 1 Like Like |Link to Comment
  • Stay Away From DryShips Going Into Earnings [View article]
    Interestingly, I submitted an excellent article last week, but it was rejected. The article analyzed Dryships' balance sheet. My conclusion was that Dryships has a relatively strong balance sheet with ample ability to borrow.
    May 20, 2014. 12:23 AM | Likes Like |Link to Comment
  • Economou's Redemption [View article]
    Or, if it falls to $3, you'll be exercised on and you'll automatically load up. Either way, I think it is a good time to devise ways to increase exposure to Dryships.
    Feb 2, 2014. 01:20 PM | Likes Like |Link to Comment
  • Economou's Redemption [View article]
    No argument from me. No company should be involved with anything unethical, at all. But after having quite a bit of time to reflect on the magnitude of what Dryships does and with what other companies do, in all honesty, I find, sadly, that Dryships is not uncharacteristically unethical. I was just better able to see Dryships ethics problems because the company is very forthright about it. The company is also quite small and easy to track compared to most other companies.

    Again, AT&T gave $2 billion to T-mobile just a few years ago for absolutely no good reason other than being unethical and skirting the law. Both stocks have been up 60%+ since. Because markets are close to efficient, there very well may be borderline ethical reasons for some of these actions that cannot be seen by outsiders.

    At the very least, I can say that unethical behavior of this type is quite common.

    My speculation is that with the change in financial strength being experienced, ethics will likely be positively influenced as well. Most of the flagrant past actions seemed to take place as a result of impending financial distress and panic.
    Jan 15, 2014. 12:41 PM | 1 Like Like |Link to Comment
  • Economou's Redemption [View article]
    LOL. You sound like a stowaway who can handle a rough storm.
    Jan 15, 2014. 12:31 PM | Likes Like |Link to Comment
  • Economou's Redemption [View article]
    With the company on solid footing, the need for unethical practices probably falls.
    Jan 15, 2014. 12:30 PM | 1 Like Like |Link to Comment
  • Economou's Redemption [View article]
    Additionally, I think there is an excellent chance that even the self-serving may have peaked.
    Jan 14, 2014. 05:31 PM | 1 Like Like |Link to Comment