Star Bulk Stock Falls After Firm Amends Dividend Policy, Announces New Repurchase Program: Retail Goes Bullish

Shares of Star Bulk Carriers Corp (SBLK) fell nearly 3% on Monday after the firm announced an amendment to its dividend policy, which had been in place since 2021, and a new share repurchase program.

Star Bulk said that under the amended dividend policy, it may approve an allocation of up to 60% of cash flow from operations “less debt amortization, less maintenance/upgrade CAPEX less any deficit of cash below $2.1 million per owned vessel” towards quarterly shareholder dividends.

The company said buybacks will be prioritized when the share price trades at a significant discount to the estimated net liquidation value of its hard assets. It said cash flow may also be used for opportunistic vessel acquisitions and investments that will generate enhanced returns over time and for general corporate purposes.

Last week, the company’s board of directors canceled the existing $50 million share repurchase program and authorized a new share repurchase program of up to $100.0 million under the same conditions.

The firm said it bought back 293,474 shares at an average price of $15.5. “The repurchased shares will be withdrawn and canceled, leaving the total number of shares issued and outstanding post cancellation at 117,730,112,” it said.

CEO Petros Pappas said that for the past several months, the firm’s shares have been available for purchase at prices that appear more attractive than the corresponding prices for dry bulk vessels. “We are amending the company’s dividend policy to increase its flexibility to take advantage of this market inefficiency for the benefit of all shareholders,” he said.

Following the announcement, retail sentiment on Stocktwits jumped into the ‘bullish’ territory (59/100) compared to ‘neutral’ a week ago.

Star Bulk Sentiment Meter and Message Volume as of 10:02 a.m. ET on Dec. 16, 2024 | Source: Stocktwits

One Stocktwits user believes it may be a good time to buy the stock.

Meanwhile, shares of Star Bulk have lost over 29% since the beginning of the year.

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