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Did George Economou Just Lose Control Of DryShips Inc.?

Jul. 10, 2017 8:09 AM ETDryShips Inc. (DRYS)35 Comments
Kurt B. Feierabend profile picture
Kurt B. Feierabend


  • DryShips has been a controlled company via the Series D preferred.
  • Dilution may have driven the Series D votes to below common votes.
  • If DryShips is no longer a controlled company, it may be only temporary.

As most people already know, DryShips' (NASDAQ:DRYS) CEO George Economou created a dual share structure arrangement for DryShips where common shareholders owned an equity stake while Mr. Economou owned a controlling interest in DryShips through his beneficially-owned super-voting series D preferred shares. Common shareholders, who continue to buy common shares, have had no meaningful vote.

Additionally, DryShips has entered into a number of deals to sell shares to a little-known entity named Kalani and has been using Kalani to push out large numbers of common shares to the public since late last year. This has decimated the share price and DryShips has enacted a number of reverse splits. The reverse splits have applied to the common, and, at least initially, also to Mr. Economou's series D preferred shares.

The details of the series D preferred were described in DryShips' 20-F filed in March, “On September 9, 2016, we entered into an agreement with Sifnos to convert $8.75 million of the outstanding amount under our then existing secured revolving credit facility to 29,166 shares of Series D Preferred Stock (3,500,000 shares before the 1-for-15 and 1-for-8 reverse stock splits). As of March 10, 2017, our Chairman Chief Executive Officer, Mr. George Economou, may be deemed to have beneficially owned, directly or indirectly, 100% of our Series D Preferred Stock. The shares of Series D Preferred Stock each carry 100,000 votes.”

Those 3.5 million shares of Series D would have had the equivalent of 350 billion votes but by March, the reverse splits reduced that number to 29,166 shares with a total of 2.9 billion votes. Since March, there have been three additional reverse splits:

04/11/17 1-for-4
05/11/17 1-for-7
06/22/17 1-for-5

Assuming the reverse splits continued to apply to Series D, those 29,166 series D shares would now be down to only 208 shares carrying

This article was written by

Kurt B. Feierabend profile picture
Kurt B. Feierabend is a financial analyst and private investor. He holds an MBA from the University of Minnesota and has an engineering background which includes nuclear power generation, electrical engineering and software engineering.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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