Nordic American Tankers Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Nordic American Tankers (NYSE: NAT  ) were taking on water today, falling 10%, after the company announced a share offering.

So what: In a move that the company says puts it in a position for future growth, 5.5 million shares are being offered to investors. The underwriter will be selling shares "from time to time in negotiated transactions or otherwise, at market prices."

Now what: Management may be trying to spin this as a growth opportunity, but tanker companies are barely operating above cash costs right now so the company really needs the cash cushion. It has been taking out more debt to stay afloat recently, but management thought now was a good time to shore up its long-term finances further. I'm not rushing to buy this discount, because I still have questions about rates in a tanker business that has been pummeled in recent years.

Interested in more info on Nordic American Tankers? Add it to your watchlist by clicking here.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 19, 2012, at 2:52 PM, psl8er wrote:

    This company is raisng funds to continue its ridiculous habit of paying dividends it cannot afford.

    It is losing cash on every ship every day in the weakest tanker sector and has taken delivery of very expensive new ships recently.

    The idea that it should buy more ships with some 10 year old ones being discussed is even more absurd.

    The company needs to conserve cash, reduce its expensive ship management costs and sell some ships.

Add your comment.

DocumentId: 1761131, ~/Articles/ArticleHandler.aspx, 4/19/2014 4:22:53 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement