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Dryships' Questionable Deals Don't Help Investor Confidence

Mark A, if DRYS ever decided to buy the 4 ships next year, it is actually paying $160 + $105 + $55 = $320 mln for them. That is only 20% discount from the $400 mln. Given the market has tanked and DRYS paid a premium for the ships, the discount is hardly enough to justify putting $105 mln for the option to purchase. After payout this huge amount of cash and failed to sell its ship earlier, DRYS might not survive long enough to exercise the option to purchase even if, big IF, ship price skyrocketed in late 2009.

Dryships' Questionable Deals Don't Help Investor Confidence

Mark A, you seriously don't see the conflict of interest? He personally is $160m - 35% * $160m = $104m richer after the transaction, but the company is poorer. The company already has high level debt, with that much cash removed from the balance sheet, and plus the ships are not generating positive cash flow, the company can go under very soon.

Funny thing is the CEO can buy the whole company from bankruptcy with small portion of that $160m that he just earned from the company.

Economou is one of the most crooked CEO, but he learned one thing that as long as you disclose everything you are not committing crime even you are stealing money from the public shareholders.