The bulk freight market is very cyclical, and with BDI tanking the fundamentals are completely shite. If you really want to trade it, use hourly charts and MACD. However, this is more of an investment - just don't buy it yet. Wait until BDI turns upwards again, go long, and then wait until BDI tops out. Do that with leverage and you'll be very rich. But it might be a year or more until the right time arrives. And there's going to be so much shit in the shipping industry in the next year - bankruptcies, cancelled contracts, newbuilds that aren't financed etc. I traded these stocks a few years ago, and when they move they MOVE!
I believe they said they could have problems financing their debt. debt to cash ratio is huge, people are selling first and thinking later
Hardly the worst ever. What about all the stocks that have gone from high prices to fractions of a cent or zero?
They issued a prospectus that made that statement under the "all the things that could possibly go wrong" portion of the prospectus. If you read any company's prospectus you will see a long scary list of factors that could negatively impact a company. Unfortunately, the dry shippers are in the middle of the perfect storm of low spot market rates, global recession, and an enormous institutional selloff in the market, so the comment in a prospectus that a "worsening economy could negatively impact ability to pay debt" is basically the kiss of death until proven otherwise. In good times, nobody bothers to pay attention to that part of the prospectuses; in bad times, that's probably the only thing they read. I still find it amazing that a stock could be priced at pretty much the earnings per share they just reported for the QUARTER ($3.50).