3 Stocks That Could Lose You a Lot of Money
Warren Buffett's No. 1 investing rule is to never lose money. While that's easier said than done, we can get closer to achieving that goal by helping you avoid stocks that have little chance of paying off. Here are three companies that are more likely to take your money than create more of it for you.
DryShips (NASDAQ: DRYS) spent the bulk of last year shoring up its balance sheet after sinking shipping rates overwhelmed its finances. However, those efforts paid off, since the dry bulk shipper entered 2017 back on solid ground. In fact, the company even had the financial flexibility to spend money on rebuilding its decimated fleet. That said, instead of undertaking a methodical rebuild, DryShips went on a buying binge, spending $765.5 million to buy 17 vessels since the start of the year. The problem with this is that the company issued a boatload of new stock to finance these purchases, unleashing a flood of shares into the market. Through the end of the first quarter, the company had sold a whopping $570 million of new shares, which is a breathtaking amount of dilution considering the company's minuscule market cap. In fact, over just the past few weeks the company's outstanding share count has spiked 370%. This unrelenting dilution has crushed the company's stock price, which has fallen nearly 100% since the start of the year.
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Source: Fool.com
