Star Bulk Carriers Prices Secondary Offering at $22, Shares Leap 4.4%


Shares of Star Bulk Carriers Corp. (SBLK) jumped 4.4% to close at $23.49 on June 22 after the company announced the pricing of 2.383 million shares of its common stock at $22 per share.

Star Bulk Carriers is a global shipping company providing worldwide seaborne transportation solutions in the dry bulk sector.

The offering is being made by OCM XL Holdings, L.P., which is a special purpose holding vehicle owned indirectly by multiple funds and accounts managed by Oaktree Capital Management, L.P. (See SBLK stock chart on TipRanks)

After the completion of the offering, funds affiliated with Oaktree Capital Management, L.P. are expected to own approximately 25.42% of the SBLK’s common shares.

SBLK is not selling any shares, and therefore will not receive any proceeds from the offering. The offering, expected to close on June 24, is subject to mandatory closing conditions.

Jefferies analyst Randy Giveans recently raised SBLK’s price target from $25 to $28 (19.2% upside potential) and reiterated a Buy rating.

Giveans believes that there is a visible dry bulk shipping market recovery driven by the improving global economy, growing demand for seaborne dry bulk commodities, and the best supply-side fundamentals seen in years.

He said, “Management expects dry bulk rates to remain firm this year as the global economy improves and steel production by China and others remains elevated in 2021.”

Overall, the stock has a Strong Buy consensus rating based on 6 unanimous Buys. The average analyst Star Bulk Carriers price target of $30.60 implies 30.3% upside potential from current levels. Shares of SBLK have jumped 228.5% over the past year.

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