NEW YORK, Sept. 1, 2017 /PRNewswire/ -- Kaplan Fox & Kilsheimer LLP
(www.kaplanfox.com) is investigating claims on behalf of investors
of DryShips Inc. ("DryShips" or the "Company") (NASDAQ:
DRYS).
Class action litigation has been filed in the United States
District Court for the Eastern District of New York against DryShips and certain Company
officers on behalf of investors who purchased DryShips common stock
between June 8, 2016 and July 14, 2017, inclusive (the "Class"), alleging
violations of the Securities Exchange Act of 1934. The complaint
alleges that throughout the Class Period, the defendants made
materially false and misleading statements and failed to disclose
that the defendants were engaged in a wrongful stock manipulation
scheme.
On July 13, 2017, The Wall
Street Journal published an article entitled "A Shipping
Company's Bizarre Stock Maneuvers Create High Seas Intrigue."
The article describes in detail the various transactions between
DryShips and Kalani Investments Ltd. ("Kalani"), a British Virgin Islands firm. Allegedly,
DryShips raised hundreds of millions of dollars of capital in a
series of transactions beginning on or around June 8, 2016 by selling newly-issued shares to
Kalani at a significant discount to the stock-market price.
The cash injected into the Company by the dilutive offerings was
used to buy ships from DryShips' CEO, Chairman and founder,
George Economou ("Economou") who had
purchased ships from the Company the prior year when the Company
was low on cash. After each sale of shares to Kalani, Kalani
would quickly dump shares to the investing public, thereby causing
a decline in the price of DryShips' common stock. Further,
The Wall Street Journal article reports that in an
apparent effort to counter the downward pressure that each new
supply of shares put on the stock price, DryShips used reverse
stock splits to increase the per share price and prevent its stock
price from falling below $1 to avoid
being delisted from the NASDAQ. Kalani ultimately acquired
securities convertible to more than $626
million in DryShips common stock, or roughly 100 times
DryShips' stock market value as of early November 2016.
According to the The Wall Street Journal, a $10,000 investment in DryShips stock at the
beginning of November 2016 was worth
$167,000 during a brief price spike
in mid-November 2016, but only about
$2 by the time the article was
published on July 13, 2017. In
fact, the Company's stock price has dropped more than 99.9% since
early 2017.
Additionally, The Wall Street Journal article reports
that since Kalani purchased DryShips' stock with the intention of
reselling it, the transactions between DryShips and Kalani
essentially constituted "pseudo-underwriting", with Kalani in the
position of the underwriter of a de facto public
offering. Kalani, however, never registered as an underwriter
with the Securities and Exchange Commission ("SEC"), which is
potentially a violation of federal securities laws according to
The Wall Street Journal.
On August 30, 2017 after the
market closed, DryShips disclosed that it had received a subpoena
from the SEC requesting certain documents and information in
connection with offerings made by the Company between June 2016 and July 2017. Following this
news, DryShips' shares declined by 10.53% to close at $2.72 per share on August
31, 2017.
If you are a member of the proposed Class, you may move the
court no later than September 12,
2017 to serve as a lead plaintiff for the purported
class. You need not seek to become a lead plaintiff in order
to share in any possible recovery. If you would like to
discuss the complaint or our investigation, please contact us by
emailing pmayer@kaplanfox.com or by calling 800-290-1952.
This press release may be considered Attorney Advertising in
some jurisdictions under the applicable law and ethical rules.
Kaplan Fox & Kilsheimer LLP,
with offices in New York,
San Francisco, Los Angeles, Chicago and New
Jersey, has many years of experience in prosecuting investor
class actions. For more information about Kaplan Fox & Kilsheimer LLP, you may visit
our website at www.kaplanfox.com. If you have any questions
about this Notice, the action, your rights, or your interests,
please contact:
Robert N. Kaplan
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, New York 10022
(800) 290-1952
(212) 687-1980
Fax: (212) 687-7714
E-mail: rkaplan@kaplanfox.com
Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
350 Sansome Street, Suite 400
San Francisco, California
94104
(415) 772-4700
Fax: (415) 772-4707
E-mail: lking@kaplanfox.com
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SOURCE Kaplan Fox &
Kilsheimer LLP