Dorian emerges unscathed
Wall Street does not appear to be rattled by reports that Scorpio Tankers is looking to offload its stake in Dorian LPG.
Dorian is one of the world’s largest operators of very large gas carriers.
Shares of the New York-quoted operator slipped 1.24\% before bottoming out at $12.75 in the hour leading up to the close.
Observers who track the stock say the modest dip, coupled with lacklustre trading volume, suggests investors weren’t spooked by a securities filing that set the stage for the sale of shares held by some of Dorian’s biggest backers “from time to time”.
Most declined to discuss the revelation at length but one forecaster admitted he was “somewhat surprised” to learn Scorpio may offload its stake since management dismissed this as an unlikely scenario during a conference call a few weeks ago.
A leading equity analyst was quick to point out that the product tanker giant’s president, Robert Bugbee, didn’t rule out the possibility altogether, however, and noted the company said it would like to remain “flexible” going forward.
“If you were looking at a technical basis, we’re a much better buyer of that stock than we are a seller of that stock at the moment,” Bugbee said during the briefing, which was held in late October.
After applauding Scorpio’s performance in the third-quarter, he added: “We don’t need the liquidity of that stock in the form of a sale to fulfill our strategic objectives at the moment.”
Wall Street has been rife with speculation that the tanker owner might pursue a sale ever since Bugbee exited Dorian’s board of directors, which happened a week after the industry veteran said his company would likely retain its stake in the near-term.
At the time one equity analyst who follows Dorian’s stock, Erik Nikolai Stavseth of Norwegian investment bank Arctic Securities, argued that the disposal of Scorpio’s stake would be a positive development.
“We argue that a sale of stock from Scorpio Tankers would do well for Dorian LPG as it would increase liquidity having averaged 230,000 shares per day,” Stavseth told clients in a daily market briefing.
