DryShips Inc. (NASDAQ:DRYS) stock dropped 72% on Thursday afternoon after its whirlwind rise over the past three days, adding to the erratic shifts in the shipping industry over the past few days.
DRYS stock didn’t trade on Wednesday as NASDAQ questioned DryShips, looking for insight as to why DRYS stock had such a meteoric rise. DryShips wasn’t able to respond in time for Wednesday’s trading, but after-hours trading saw the stock rise another 64% before Thursday’s calamitous result. (Source: “DryShips Stock Stalled, While Other Shipping Stocks Shift Into Reverse,” The Motley Fool, November 16, 2016.)
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The shipping industry in general has been on the rise since the election victory of Donald Trump in the United States, although no stock has shared the level of success experienced by DryShips. The company’s share prices had increased by 1500% from November 8 to November 15 after news broke that the company was working with lenders to restructure its bank credits facilities.
The Baltic Dry Index has also seen itself rise, with gains of 5.6% over the last month. But the wild ride for DRYS stock might finally have come crashing down to earth with Thursday’s massive decline.
Another shipping company that benefited astronomically—at least at the start—from this renewed interest in shipping companies was Diana Containerships Inc (NASDAQ:DCIX), which had a similar surge of nearly 1,000% over a 48-hour period. DCIX stock, however, has been following the wake of DRYS stock for the entire week and, much like its predecessor, it too has fallen off a cliff today by dropping 53% by early afternoon.
It’s hard to predict where these shipping stocks will go next. Their volatility could certainly scare off a number of investors, or entice others who see a potential huge rebound. There was certainly money to be made in those initial boom days earlier in the week, with the share prices rising as they were.
The final question here is what role President-elect Trump has had on the performance of these stocks in the past few days.
There’s certainly a lot of question marks following DRYS stock and others like it. With the stock apparently not settling any time soon, it will be worth keeping an eye on for the near future.
