What happened

Shares of container ship operator Seaspan (NYSE:SSW) got torpedoed in May, falling 23.7%.

So what

A significant fraction of Seaspan's share price decline occurred in the final hours of the month, when the stock plummeted 12% in a single day for no apparent reason.

Even before that ill-favored day, Seaspan stock had shed 19% of its value from the start of the month through May 26, in a slide that began with its first-quarter earnings release on April 27. In the report, Seaspan shared with investors the disappointing news that its revenues fell 7% in Q1, and "normalized" earnings had plunged 55%.

Ship viewed through cargo container

Seaspan sees a ship at the end of the tunnel. Image source: Getty Images.

Now what

Management blamed the bankruptcy of South Korean shipping giant Hanjin for much of its troubles, as that company's failure sidelined some of Seaspan's vessels and cut its ship utilization rate. On the other hand, management also said that it saw increases in the rates it could charge to lease its smaller Panamax cargo ships.

While this claim may sound like wishful thinking on Seaspan's part, it was supported by commentary from Danish shipping giant A.P. Moller-Maersk, which noted in its Q1 report that freight rates were up 4.4%, with shipping volumes also on the rise, and "quite strong demand" evident toward the end of Q1 and even into April.

This all has some investors beginning to hope that end of the shipping slowdown is in sight, and that conditions have finally bottomed out. If they're right, Seaspan's tumble in May could yield to better news when the company next reports earnings around the end of July.

Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Seaspan. The Motley Fool has a disclosure policy.