Is OceanPal IPO Stock a Good Buy?

If you find yourself lost at sea — and assuming you don’t have the ability to send a distress signal to the U.S. Coast Guard — exposure to the elements might lead to delirium. And that circumstance could tempt you to…

consider taking a small sip of the vast waters around you.

However, the kidneys impose a cruel irony on this choice. Should you drink seawater, your bloodstream will then contain excessive salt. In order to remove this surplus, the kidneys flush the salt out through liquified waste, which then leads to dehydration. Thus, the better option is to pray for rain — or perhaps catch and eat a fish, which will provide less salty fluids.

Sure enough, the folks behind the upcoming spinoff of OceanPal Inc. might give off more Sunday revival vibes than those of a soon-to-be publicly traded corporation. On one hand, the debut couldn’t have come at a better time. A newly formed subsidiary under dry bulk shipping giant Diana Shipping Inc. (NYSE: DSX), OceanPal can certainly advantage the explosion of interest in global supply chains.

But on the other hand, the worsening COVID-19 pandemic — specifically the omicron variant — threatens to spark a dark, thunderous cloud on the proceedings.

When Is the OceanPal IPO Date?

Unlike a traditional initial public offering (IPO), OceanPal’s market debut does not represent the first time that the enterprise will go public. While the company is a newly formed subsidiary, technically, the asset reallocation that comprises the spinoff previously traded under Diana Shipping. Therefore, rather than having an official entry on the IPO calendar, OceanPal instead has a distribution date of Nov. 29, 2021.

In a corporate press release on Nov. 24, Diana Shipping’s management team disclosed the date, having filed a registration statement for the OceanPal entity under Form 20-F with the U.S. Securities and Exchange Commission (SEC). Shares will trade on the Nasdaq exchange under the ticker symbol OP.

During the second half of October, management released the details of the spinoff, which primarily involves Diana Shipping contributing 3 of the firm’s older dry bulk vessels. OceanPal will then act as the holding company for the ships in question.

Further, Diana will provide initial working capital of $1 million to the subsidiary. Shareholders of the parent company as of Oct. 29, 2021, will collectively receive all common shares of OP stock. Diana will retain influence with OceanPal as it will gain the subsidiary’s preferred shares, entitling the parent organization to certain preferred dividend and voting rights.

Regarding the transaction, Diana Shipping CEO Semiramis Paliou stated that the spinoff “represents a significant return of value to our shareholders reflective of the company’s capability to capitalize on the strong dry bulk market.”

Further, Paliou believes that…

 

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