UPDATE 2-Eagle Bulk suspends dividend, cuts capex; shares plunge
BANGALORE, Dec 19 (Reuters) - Dry bulk shipper Eagle Bulk Shipping Inc (EGLE.O) suspended its dividend and reached an agreement with a Chinese shipbuilder that will enable it to cut its capital expenditure by 33 percent, as it looks to preserve cash in the current downturn.
Shares of the company fell as much as 29 percent.
"The dividend cut is what is hurting the stock... I think the more people look at it, the more they are going to realise that the dividend might come back," Maxim Group analyst Charles Rupinski said.
Earlier this month, Eagle Bulk rival Diana Shipping Inc (DSX.N) suspended future dividends to improve its cash position.
Shares of Eagle Bulk fell to a low of $6.30, before recovering slightly to trade down $2.31 at $6.62 Friday afternoon on Nasdaq.
Like I said before, these shipping companies are in a world of hurt, and I will be surprised to see them survive (although the guy on Fox News today totally disagreed with that.... he probably owns these stocks, ha, ha).
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