Investment bank the Maxim Group came under attack for its controversial shipping deal-making on Thursday on a panel at the annual Marine Money Week conference in New York.
The hostile fire came from Ridgebury Tankers chief financial officer Hew Crooks, who took aim at Maxim shipping investment banker Larry Glassberg as he sat just inches away on the stage.
The exchange started innocently enough as Crooks recounted how Ridgebury had disposed of some 40 vessels over the past two years in the suezmax and MR tanker sectors while pocketing roughly $750m, with all sales coming above net asset values.
But sparks flew when Crooks wondered aloud how a Maxim client — New York-listed Top Ships — had managed to lose most of its share value over roughly the same period, while operating tonnage of similar nature.
“Since March of 2022, it’s been an all-time great market to own suezmaxes and MRs, yet Top Ships is down 97% while we’ve made a lot of money for our investors,” Crooks said, before asking Glassberg to explain how this is possible.
Glassberg replied that he would not answer specifically about Top Ships or any individual owner, but he spoke generally about the lack of committed shipping investors in the market.
“There’s a little bit of a break in the market today,” Glassberg told Crooks. “There are very few if any long-term fundamental shipping investors in the public markets.
“There’s bigger things that have to happen in the market.”
Crooks shot back.
“If every deal that gets done loses 90% of its value, how are you ever going to have long-term institutional investors?” he asked.
Besides representing Top Ships, Maxim has also worked with a group of mostly Greek shipowners on often-dilutive share deals that typically package warrants with common stock.
As TradeWinds has reported, such deals have drawn criticism both from burned retail investors who likened them to “scams” and from smaller Greek shipowner Pyxis Tankers, which complained that investors were mistakenly lumping it in with the Maxim companies.
“I think it damages everyone,” Crooks told Glassberg.
“So you’re saying the deals we have done are dragging down the whole market?” Glassberg replied incredulously.
Crooks then added: “I’ve been buying public shipping stocks and I’ve made a ton of money. All these other stocks have gone up. I don’t think it’s tearing down the whole market, but it’s not a help for our industry that has struggled for a long time to make a better name for itself.”
That drew a ripple of applause from part of the audience, before Oslo-listed Gram Car Carriers chief executive George Whist — another panellist — jumped into the fray.
“The reason some companies are trading poorly is that they’re s**t companies,” he said. “The industry is not doing itself a favour by listing a lot of s**t.”
While Crooks did not attach exact dates to the comparison he made with Top Ships, the Yahoo Finance website shows the owner began March 2022 trading at $19.80 per share. Its most recent closing price on the Nasdaq exchange was at $0.66 per share.
Those numbers do indeed reflect a 97% loss of share value over the period, adjusted for a one-for-20 reverse stock split in September last year. As TradeWinds has reported, Top Ships carried out the split to preserve its listing status on Nasdaq after trading at below $1 per share for an extended period.
Top Ships is the owner of two VLCCs, five suezmaxes and three MR tankers — all built after 2019 and all but one are on long-term charters with major commodity traders.
To finance part of its newbuilding expansion, Top Ships was one of several Greek-controlled shipping companies that issue shares through Maxim.
On 2 March, Top Ships announced it had declared a “moratorium” on further equity sales beyond the end of this year.
