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Transportation

How DryShips (DRYS) Became The Next Sirius XM (SIRI)

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By Douglas A. McIntyre Updated Published

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Sirius and XM Satellite Radio were among the great cult stocks of the last decade. They were heavily traded and volatile. Investors expected their business to be the most important development in consumer electronics in years. By the time they had fought the government for over a year to complete a merger, the new company, Sirius XM (SIRI), was nearly dead. Sirius had gone from over $60 in 2000 to $.05. The company is nearly forgotten.

The firm that has taken the place of Sirius among market gamblers is DryShips (DRYS), the Athens-based shipping company. A year ago, the stock traded at $116.43. Recently, it dropped to $2.72. Over 35 million shares in Dryships trade in an average day.

By most measures, DryShips is tiny, which makes the market’s obsession with the company even more fascinating. Last quarter, the firm has revenue of $196 million, down 15% from the year before. The company lost $101 million compared to a profit of $176 million in the same period last ear when DryShips had a market cap of $18 billion.

DryShips stock is rising again. It trades near $10. Earnings were poor but beat forecasts. The company raised $500 million. The collapse in global trade that nearly brought the company down is easing.

DryShips will probably survive, but it won’t trade over $100 again. Too many people follow the stock now. They can see the company’s vulnerability which is exactly what happened to Sirius XM (SIRI). It dawned on the satellite radio firm’s investors that it was just an ordinary company, perhaps too ordinary to stay in business.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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