It was just about one year ago to the day that Maxim Group shipping specialist Larry Glassberg got ambushed in a panel appearance at Marine Money Week in New York.
The lead attacker was Ridgebury Tankers chief financial officer Hew Crooks, who ripped into Glassberg for leading warrant-based equity raises for small shipowners that had proved highly dilutive to investors.
Although it has been a while in the making, Glassberg answered back on Wednesday, the final day of this week’s conference.
Maxim fights back
He made a data-laden case for his and Maxim’s work during an on-stage interview with Marine Money president Matt McCleery.
“In the last couple of years, we’ve probably priced the best deals ever done in the maritime industry, some without warrants and some with warrants,” Glassberg said.
As one example, he cited an equity raise for Stamatis Tsantanis-led bulker owner Seanergy Maritime that he said was priced at twice the company’s net asset value and without warrants.
While Maxim’s shipping deals typically have included shares packaged with warrants, Glassberg presented data showing that across all industries in the broader market, 49.6% of all shares deals on behalf of companies with market capitalisations under $500m have been done with warrants.
Regardless of industry, warrants are often essential to attracting investor interest to smaller deals that may be perceived as carrying more risk, he contended.
“Are you willing to do warrants if you can sell at two, three, four times what the steel value is? I would take that deal all day long,” Glassberg said.
Glassberg further defended his record of service to shipping, saying that with nearly 20 years of maritime deals, he has the longest track record of any single banker continuing to work for the same bank.
“We’ve been by far the most active bank in the maritime space in the past five years, doing possibly tenfold the business of the next bank,” Glassberg added.
If Glassberg seemed to be getting a lot off his chest, it is also the case that he and Maxim have endured significant criticism over the past year or two without voicing a word of public complaint.
He had the stage to himself on Wednesday, without Crooks or anyone else to go at him.
As TradeWinds reported last June, the Maxim deals have drawn criticism both from burned retail investors who likened them to “scams” and from smaller Greek shipowner Pyxis Tankers, which complained then that investors were mistakenly lumping it in with the Maxim companies.
“I think it damages everyone,” Crooks told Glassberg at last year’s session.
“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.”
Crooks is far from alone in that view.
As recently as Tuesday, veteran Deutsche Bank managing director Craig Fuehrer talked about shipping’s inability to gain serious attention from institutional investors and index funds because companies lack sufficient scale.
“The last thing the world needs is another $300m to $500m shipping company,” Fuehrer said on an investment panel, referring to an individual company’s market capitalisation.
That, however, is the market that Glassberg and Maxim play in, and without apology.
Indeed its deals may be getting smaller, as Glassberg hinted that a one-ship IPO led by the bank is expected to be priced next week, without identifying the company.
TradeWinds reported in May that Ismini Panagiotidi-led Icon Energy plans to start small with a single panamax bulker, the 77,300-dwt Alfa (built 2006), in a deal in which $5m to $7.5m worth of its shares would be sold in the IPO, according to a preliminary prospectus.
Icon Energy intends to list its shares under the ticker symbol ICON on the Nasdaq Capital Market.
The IPO is targeting a range of $4 to $6 per share, with Maxim as underwriter.
