What happened 

Shares of DryShips Inc. (DRYS) jumped as much as 19.9% in early trading Tuesday after reporting third-quarter financial results. Shares gave back some gains late in the day but were still up 14.8% at 3:15 p.m. EDT. 

So what

Revenue jumped 65.6%, to $49.6 million, and DryShips swung from a net loss of $15.2 million a year ago to an $11.6 million profit. That equates to $0.12 per share in earnings for the quarter.

Large cargo ship on the water.

Image source: Getty Images.

Operational results were encouraging and include new vessels acquired over the past year. But to pay for those vessels, management had to issued shares, increasing the share count from 36.2 million shares to 97.3 million shares outstanding last quarter. 

Now what

Stronger results are a big positive for DryShips, but the dilution of shares is always lurking in the background. The company's management has a long history of self-dealing and destroying shareholder value. That's what's keeping me out of shares today, even if revenue and earnings are trending in the right direction. Even in a strong operating environment, dilutive share offerings are never off the table for DryShips.