Small-cap disaster of the day: Odyssey Marine
Today's Financial News - Posted June 4, 2009
It turns out finding $500 million in hidden treasure is not nearly as fun as it sounds. Odyssey Marine and its shareholders are learning the hard way today.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): Don’t you just hate it when you find $500 million laying on the street and the courts make you hand it all over to the king of Spain?
It is a great way to ruin an otherwise spectacular day.
But I don’t have to tell that to the folks at Odyssey Marine Exploration (NASDAQ:OMEX). Shares of their company are down by nearly 50% on the news a federal court has ruled the firm must hand Spain over $500 million worth of treasure from a sunken Spanish warship.
Half a billion dollars out the window.
In case you have not been following this story, Odyssey discovered what it calls the “Black Swan” and its nearly 20 tons of gold and silver at the bottom of the Atlantic in May 2007.
Eureka, we found it!
When Spain found out, it said the sunken ship was its property. It claims Odyssey found the Nuestra Senora de las Mercedes, which was shot by the British in a battle off of Portugal in 1804.
Odyssey claims it never found the ship, just the treasure.
While the court battle that ensued is incredibly interesting from the view of wreck hunters and maritime lawyers, it does little for investors other than prove to be wary of the government. (Like we didn’t learn enough over the past six months.)
The one thing investors need to take from this case is that the battle is not over. Share price may be dropping like a rock, but Odyssey has hope. There is the opportunity for appeal and the idea the wreck hunters could ultimately get a strong piece of the loot.
Obviously, this is an extremely risky investment, but the reward justifies the risk. At current prices, Odyssey has a market value of just $110 million. If it gets even a modest portion of what it found, that figure will surge.
If you want an investment worth talking about at your next summertime barbecue, Odyssey is worth a sliver of your speculative portfolio. The stock is about to get extremely volatile. Play it right and you will think you struck gold.
Next Article: Gold drops… let’s do it again!
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June 4th, 2009 at 10:57 am
What happened to the right of salvage?
And if they have to give it to anyone, shouldn’t it go to whatever South or Central American country it was stolen from by the Spanish?