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"Welcome to the fascinating world of Odyssey Marine Exploration where we've turned dreams into reality and adventure into a science that takes us deep below the ocean surface into a realm where few others dare venture."
That comes from the website of Odyssey Marine Exploration (Nasdaq: OMEX ) . Sounds pretty thrilling, right? And there's good reason for that -- because it is. The company is a treasure hunter, scouring the planet's oceans for sunken ships believed to be carrying vast riches or irreplaceable artifacts.
The whole thing seems like a pretty sweet deal for the founders and those working at the company. Embark on thrilling expeditions to find sunken treasure, all while getting paid to do it. And these intrepid treasure hunters aren't just scraping by as they chase their dreams. CEO and co-founder Greg Stemm made nearly $750,000 last year while the total compensation for the CFO and COO was nearly $400,000 each. And that was a down year from 2009 when Stemm made $1.1 million.
But how is this all working out for shareholders? By nearly every metric imaginable, Odyssey has been a disaster. Total cash burn between 1995 and 2010 from operations and capital spending was $130 million. The company has had all of two profitable years, book value is negative -- and dividends? Don't be silly.
The company has very little debt on its balance sheet (can you picture Bank of America getting excited to finance treasure hunting?), so who do you think has been on the hook for financing all of this? If you said "equity investors," then you can go ahead and grab a cookie -- the company has sold more than $100 million worth of stock, including a fresh $15 million this week.
Odyssey almost had the big breakthrough that investors have been hoping for when it found a wreck -- codenamed "Black Swan" -- that reportedly contained as much as $500 million in gold and silver coins. But, alas, treasure hunting off the silver screen isn't as simple as "finders keepers," and the company has been tied up in litigation with Spain over the rights to the fortune for years.
But is Black Swan a sign that if investors hold on long enough that the big score might happen after all? Nicolas Cage won an Oscar, so I suppose anything is possible. That "cross your fingers" hope aside, while stock market financing may have helped create a dream come true for those at Odyssey, investors that want to finance their own dreams someday are probably better off setting sail in the opposite direction from this oceanic boondoggle.