NEW YORK, July 14, 2017 (GLOBE NEWSWIRE) — Pomerantz LLP announces that a class action lawsuit has been filed against DryShips Inc. (“DryShips” or the “Company”) (NASDAQ:DRYS) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 17-cv-05368, is on behalf of a class consisting of investors who purchased or otherwise acquired DryShips securities, seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.
If you are a shareholder who purchased DryShips securities between June 8, 2016, and July 12, 2017, both dates inclusive, you have until September 12, 2017, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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DryShips Inc. owns and operates ocean going cargo vessels worldwide. It operates through two segments, Drybulk and Offshore Support. The Drybulk segment offers drybulk commodities transportation services for the steel, electric utility, construction, and agri-food industries. The Offshore Support segment provides its services to the global offshore energy industry.
In a series of transactions beginning on or around June 8, 2016, DryShips raised hundreds of millions of dollars in capital by selling newly-issued shares directly to Kalani Investments Ltd. (“Kalani”), a British Virgin Islands firm, at a discount to the stock-market price. This influx of capital enabled DryShips to roughly double the size of its fleet to 36 vessels.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Defendants engaged in a systemic stock-manipulation scheme to artificially inflate DryShips’ share price; (ii) DryShips’ transactions with Kalani were an illegal capital-raising scheme, due in part to Kalani’s failure to register as an underwriter with the SEC; and (iii) as a result of the foregoing, DryShips’ public statements were materially false and misleading at all relevant times.
On July 13, 2017, The Wall Street Journal published an article entitled “A Shipping Company’s Bizarre Stock Maneuvers Create High Seas Intrigue”. The article described in detail the various transactions between DryShips and Kalani—namely, how DryShips’ influxes of cash stoked investor interest in DryShips, enabling the Company to issue still more shares, which it then continued to sell to Kalani. Kalani ultimately acquired securities convertible to more than $626 million in DryShips common stock, roughly 100 times DryShips’ stock market value as of early November 2016. Meanwhile, to counter share-value dilution and avoid NASDAQ delisting, DryShips executed a series of reverse stock splits.
As The Wall Street Journal reported, however, because Kalani purchased DryShips stock with the intention of reselling, the transactions between DryShips and Kalani essentially constituted “pseudo-underwriting”, with Kalani in the position of the underwriter of a de facto public offering. Kalani, however, never registered as an underwriter with the SEC, in violation of the federal securities laws. Moreover, the issuance of tens of millions of new DryShips shares significantly diluted shareholder value, while the frequent and sharp spikes and drops in DryShip’s common share price, caused by DryShip’s illegal capital-raising, cost the Company’s shareholders hundreds of millions of dollars.
Since November 2016, DryShips’ share price has fallen approximately 99.9%.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
Dryships Inc DRYS By Greg Goebel from Loveland CO, USA (Yigtp_1b) [CC BY-SA 2.0], via Wikimedia Commons