Hi Jon,
The amount of issuance or "cashing out" is extremely low lately.
Indicative of : corporations do not want to sell their shares cheap
I was referring to the Shipping industry specifically when I made that comment and I was kind of just repeating what the Barron's article said.
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BUYING AND HOLDING ships between 1975 and 2002 produced virtually nil return on capital. Not surprisingly, few shipping companies went public during that time and those already listed were ugly ducklings.
Since 2002, things have changed significantly. For example, the average tanker company's earnings before interest, taxes, depreciation and amortization have increased a whopping 234%, as shown by Nordea Bank data. Such a windfall has attracted investors eager to bet on a shipping boom, driven by the rapid industrialization of China and India and their thirst for raw materials.
But, with freight rates down from their 2004 peak, and the industry having issued nearly $5.4 billion in new stock this year, equity investors have become a lot harder to please, says Andreas Vergottis at London-based Oceanic Hedge Fund.
From New York to Singapore, initial public offerings for shipping companies either failed to price within their initial ranges or sank on their debuts in October. Some companies, such as Greek tanker operator Golden Energy, were forced to withdraw its IPO plans due to tepid interest. |
