One thing unusual is occurring with dry bulk shipping shares Tuesday. As of 11:45 a.m. EDT, shares of Star Bulk Carriers (NASDAQ:SBLK) are down 8.8% and Secure Bulkers (NYSE:SB) is off 10.6%, however penny stock and fellow dry bulk shipper Castor Maritime (NASDAQ:CTRM) is crusing in the other way, up 8.7%.
So what’s up with that?
The primary two are simpler to clarify than the final. As you could have heard, the Baltic Trade Dry Index (BDI), which tracks the charges that dry bulk delivery firms can cost for hauling dry bulk items (e.g., coal, iron pellets, and grain) throughout the ocean, peaked at 3,266 on Could 5 — up 138% from the beginning of this 12 months. Then the BDI dipped, however got here near regaining its earlier heights six days later, reaching 3,254 — however it’s been typically sinking ever since.
The BDI closed at 2,881 yesterday — nonetheless up 110% from the place it started the 12 months, however effectively off its peak — and that could be making some dry bulk delivery traders nervous. A better BDI, in any case, means dry bulk delivery firms can cost extra for his or her delivery companies, gather extra income, and earn extra revenue after their fastened prices are lined. But when the BDI continues to sink, then all these optimistic dynamics will start to roll again.
If the BDI falls sufficient, Star Bulk and Secure Bulkers may start to lose cash once more, as they each did early final 12 months.
That explains why Star Bulk and Secure Bulkers shares are happening at present — however what about Castor Maritime? Why is that specific dry bulk delivery inventory going up?
One purpose could possibly be that, as a penny inventory and a “meme stock,” too, Castor Maritime inventory would not at all times comply with the pure legal guidelines of inventory market physics. Its inventory value actions might be guided as a lot by the optimism of momentum traders as by any developments in macroeconomics. In that regard, Castor Maritime is on the cusp of effecting a 10-for-1 reverse stock split which may each carry its (apparent) inventory value out of penny inventory land to method $4 a share, and save the inventory from the specter of a delisting from the Nasdaq Inventory Market.
Robinhood traders and WallStreetBetters could also be betting on that occasion at present, and hoping that an apparently extra worthwhile Castor Maritime inventory, and one secure from delisting, will achieve new momentum and proceed to rise, it doesn’t matter what the BDI does. However in case you ask me, that is a shedding guess. If Castor Maritime could not earn a revenue when instances had been good for dry bulk shippers, I shudder to suppose what is going to occur if instances flip unhealthy.
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