What happened
Easy come, easy go. Just one day after Castor Maritime (CTRM -0.61%) shares surged in response to the company finally reporting a profit (after four straight quarters of trying), gravity reasserted its hold.
And Castor Maritime stock is down again today -- 9.8% as of 3:45 p.m. EDT.
Image source: Getty Images.
So what
So what's ailing Castor Maritime this time? In three words: the Baltic Dry Index (BDI).
As a shipper of dry bulk cargo, Castor Maritime's fortunes are intimately tied to the movements of the BDI, which tracks the rates that dry bulk shipping companies can charge for hauling dry bulk goods such as coal, iron pellets, and grain. But after surging through most of this year, the BDI recently took a turn for the worse. Indeed, since hitting its peak on May 5, the index has tumbled 24.3% in just under one month, closing at 2,472 last night.
Now what
So what does this mean for Castor Maritime? Basically, the same BDI that reflected Castor Maritime's ability to charge enough for its services to earn a profit last quarter is now forecasting weaker pricing that may threaten Castor Maritime's ability to earn a profit this quarter.
Investors are spooked by the prospect -- and perhaps rightly so. Until the BDI turns higher again, you can expect to see Castor Maritime stock continue moving lower.
