Top Ships (NASDAQ: TOPS) stock should jump 1,200% at the open today. TOPS stock rising 12 x is not, however, a sign that the company is now doing something right. It’s a sign that something has been going wrong. For Tops did this a year back - a year and a few days anyway - and that didn’t solve the problem then. Having to undertake the same technical move twice in a year to solve the same basic technical problem just isn’t one of those good signs. We might even think of it as being a warning or something.
As to what’s done at Top Ships: “Top Ships Inc. owns and operates tanker vessels worldwide. The company’s medium range tanker vessels transport crude oil, petroleum products, and bulk liquid chemicals. As of December 31, 2022, it had a fleet with a total capacity of 1,435,000 deadweight tonnes (dwt) consisting of one 50,000 dwt product/chemical tanker, five 157,000 dwt Suezmax tankers, two 300,000 dwt very large crude carriers, and two 50,000 dwt product tankers.” That the company hasn’t been doing very well is a bit of a puzzle. For tanker rates have been going absolutely mad as a result of sanctions. The entire global oil market has had to reroute all that Russian oil from European destinations to Far East, all the oil that used to go to the Far East to Europe. Inevitably this means longer journeys therefore more tanker capacity and leasing. But Tops seems not to have benefitted all that much. At least, by its stock price it hasn’t.
Top Ships stock price from Google Finance
That boost last year was the result of a reverse stock split: “The effect of that 90% TOPS stock price fall though is that it has fallen below the NASDAQ $1 minimum offer price rule. So, something must be done and something has been done. There's been a reverse stock split – a consolidation to Brits. Here simply that what used to be 20 pieces of stock is now one. A 20 for one reverse split that is.”
And now, only just over a year later, here we are again: “TOP Ships Inc. (TOPS) will effect a one-for-twelve (1-12) reverse split of its Common Stock. The reverse stock split will become effective on Friday, September 29, 2023. “
That’s really not one of those good signs, that they’ve had to repeat this. All to make sure that the stock price doesn’t remain below the Nasdaq $1 minimum bid price. To put this another way, when we account for stock splits over time Top Ships was trading at $20,000 a share in 2018 and now it’s at 50 cents before this latest one. That’s some value destruction and while it’s possible to think that things will turn around that’s some triumph of hope.