TOP Ships Inc (NASDAQ: TOPS) stock flew in the market on Friday, gaining nearly 200%. Those gains are continuing this morning, with the stock trading on gains of over 65% in the premarket. So, why the gains?
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TOPS Announces Redemption Of Series E Shares
In an SEC document that was filed this morning, TOP Ships said that it has redeemed 5,640 shares of Series E Convertible Preferred Stock from Family Trading Inc. Family Trading is a company related to Mr. Evangelos Pistolis, the President and CEO of the company.
In the filing, TOPS said that it redeemed the shares for a total price of about $6.4 million. Following the transaction, there are 10,364 shares of Series E Convertible Preferred Stock outstanding.
Another Recent Story Leading To Excitement
About a week ago, TOP Ships announced that its previously announced sale of the M/T Eco Palm Desert has been completed. This means that the vessel has been delivered to its new owner and all debt associated with the vessel has been fully paid.
Putting these two announcements together tells us that TOPS recently saw an influx of funding coming through the door through the sale of the vessel. With these funds, the company has greatly reduced its debt with lenders, including a fund related to the CEO of the company.
Other News That Will Help TOPS Ahead
Moving forward, we could see further gains in TOP Ships. At the moment, a perfect storm is taking place that will likely improve operational efficiencies at the company.
Believe it or not, the stock will likely benefit from coronavirus news ahead. As the global COVID-19 pandemic continues, we’re seeing a couple interesting things:
- Product demand is skyrocketing in certain categories. In particular, paper products, personal health products, cleaning supplies, and other like categories are seeing a jump in demand. Increasing demand from any end product will increase shipping requirements for that product. With sweeping increased demand in various categories, the shipping sector is also seeing increasing demand, creating an opportunity for TOPS to capitalize.
- At the same time, fuel prices have fallen dramatically. Yesterday, I filled my tank on my GMC Yukon for just over $20. I can’t remember the last time gasoline was so cheap. Well, this is great for TOPS and other shippers. After all, one of the largest expenses in the industry is fuel cost. So, as oil and fuel made from the black gold continue to fall in value, operating expenses at TOPS and other similar companies are being reduced.
All in all, TOPS may be a stock to watch very closely ahead.
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