Bankrupt US bulker operator Eagle Bulk Shipping's shares soared in early trading Monday despite lingering fears about the near-term future of the dry-bulk market.
The Nasdaq-quote Eagle Bulk Shipping's stock climbed by nearly 20% before topping out at around $0.91, which is nearly $0.20 higher than its 52-week low but well below a high of $8.35.
Eagle Bulk Shipping is undergoing a Chapter 11 restructuring and many bulker stocks have taken a beating in recent weeks, industry observers admit the rally caught them off guard.
Eagle Bulk confirmed that the judge overseeing its bankruptcy case rubber-stamped the terms of its pre-packaged restructuring plan.
“Even though shareholders will get just 0.5% of the new-and-improved Eagle Bulk it seems the filing put many at ease,” noted one, adding: “The rally also suggests investors see value in the warrants that could push their collective stake to nearly 8%.” Eagle Bulk Shipping has seen what one described as “wild fluctuations” in its share price before and after it filed for Chapter 11 bankruptcy protection in New York.
Dry Bulk Shipping News - Shipbroker Notes