Last week brought considerable corporate updates for Seanergy Maritime Holdings Corp. (NASDAQ:SHIP
, SHIP message board
), though their stock still gives no insights about its future direction of move. The week closed with a jump up, but on an indecisive investor mood and with the help of stock promoters.
Seanergy Maritime Holdings' closed Friday's trading session at $1.22 for a share, which resulted from a 8.93% increase from the previous close. The price jumped above the 50-day moving average on more than twice the average volume. But on the extremely high daily volatility it seems that the market could not easily consolidate and thus despite of the constant increase throughout the day, it is probably too early to see strong recovery signs.
Along with the other relevant corporate updates, the next stock promotion for SHIP has been disclosed last Thursday. This could however could not be real news for the market, as it seems that a famous investor relations company is receiving $6,000 in cash each month to promote the stock.
On Friday, Seanergy Maritime filed that it has secured a loan facility of up to $97.3 million in order to finance part of the acquisition costs of four new ships. The additional borrowing will add to the nearly $300 million other long-term debt the company has so far, but the new vessels still give the market some optimism that the revenues and the profits will grow and the cash position of the company will be improved.
Though, the indecisive sideways move of the stock cannot be that surprising on the progressively growing dilution risks. Last Wednesday the company filed the registration of up to 45.3 million new shares of common stock, to be issued upon the conversion of certain convertible warrants. The new shares were supposed to be offered for sale to the public from time to time and according to the market conditions. The company will receive no proceeds.
As a results from that announcement, the price of the shares dropped considerably, but could not fall below some previous lows, meaning that the market does not expect the extreme dilution to happen that soon, also in regard of the relatively high conversion prices. Previously, the annual shareholder meeting secured the dilution for Seanergy Maritime Holdings, by voting for the increasing the number of authorized shares of common stock from 201 million to 501 million.