It's not safe to walk on Wall Street after dark, Fools. There in the shadows lurk some cunning assailants looking to pinch your hard-earned equity.
Undeterred by mounting headwinds, the spring rally of 2009 floats to heights that make the air grow thin. Even a seemingly endless supply of dilutive equity offerings by debt-laden shippers like DryShips
The $600 million capital fundraising effort announced by Terex
Of course, the resulting improvement to liquidity is a welcome shift from the degree of uncertainty that faced these shares just a few months ago. In the context of a 40%-45% projected decline in 2009 revenue, this $600 million infusion could ultimately prove crucial for the company's survival if such market weakness persists.
Competitor Joy Global
With such uncertainty continuing to color the outlook for this sector, I urge Fools to exercise considerable caution approaching these stocks unless market conditions improve dramatically or this broader rally finally finds cause to question its very existence.
If enthusiasm for this rally proves finite, as I believe it may, then voluntary public financing of corporate debt will (at least temporarily) go extinct. When the dust settles, I don't want Fools to bear the scars of an attack like that from Tyrannosaurus Terex.