Has the Golden Boy lost his Lustre?

We hear that Peter Georgopoulos has decided to take time away from his pheasant hunting to hit the road to pitch his latest shipping creation, Baltic Trading, to investors. There has been a lot of talk in the industry about whether this deal will be successful or not and why. The structure of the deal is certainly attractive to the investment world, a company that emulates the strategy of Nordic American Tankers (NAT) in the drybulk sector, and would replace DryShips (DRYS) and Excel Maritime (EXM) as the stock to buy if you want exposure to the Baltic Dry Index (BDI). In truth, DryShips fell out of favor with this group of investors after they started time chartering its drybulk vessels and went out and acquired drillships, and is now the stock to buy if you want exposure in that segment of the shipping space.

However, we hear the deal isn't an easy sell as you would expect as Mr. Georgopoulos' recent track record for investors has taken several hits. First was the timing of General Maritime's (GMR) purchase of Arlington Tankers around the peak of the tanker market, followed by GenCo Shipping and Trading's (GNK) cancellation of six newbuildings when the market collapsed, which in hindsight, may not have been the best move since the market quickly recovered afterwards, and finally culminating with the latest bond offering from General Maritime, which ended up with a yield even higher than the Greek Government's (Ok Greece's yield isn't even that high but it may be in the same range soon enough)!

Peter "Gold" used to be the darling of the investor world, a Greek-American who understood both, Shipping and Wall Street. Over the course of his career he has made a lot of money for his shareholders and partners, however, the collective memory of the investment world is tends to be short and losing investments are remembered much longer than winning ones. This deal is being looks upon as a bellwether in the shipping industry, and if it succeeds expect to see several more shipping IPOs launch in the coming months, both in tankers and in drybulk. However, we view this deal as more of a test of the faith of investors in Mr. Georgopoulos, not the market as a whole and it will be interesting to see what happens.