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You're at a fruit market. But, instead of just being able to buy apples at this fruit market, you can also sell fruit.
You're not a farmer, so you come to the market to buy some apples and you see two fruit stands. Fruit Stand A on the left
is buying and selling apples at 50 cents apiece. However, Fruit Stand B on the right is buying and selling apples at 53 cents
apiece. People are buying and selling apples at these two stands all the time, and the price at a stand could change at any
moment. But, while you're there, apples are 50 cents and 53 cents, respectively.
You're a smart person, and you quickly
realize that you can buy apples from Stand A and then sell them across the street to Stand B and make a 3-cent profit. But
you have to do it now; you can't wait. So you buy all the apples at Stand A and then run to sell them all to Stand B.
Congratulations.
You've committed fruit-stand arbitrage.
Arbitrage is exactly that: the selling of the same item between two different
markets to make a profit off the mathematical differences in price. However, it's not apples that are traded--the goods in
question are usually stocks, currencies and other securities. Arbitrage happens when you get a stock, usually a common one
like General Electric that's traded on multiple markets (Japan, Hong Kong, U.S., etc¿). The stock is usually worth within
fractions of a penny the same on each of those markets. However, there are often some minor variations.
People who
participate in arbitrage take advantage of these variations--and make a ton of money doing it. As seen in the fruit stand
example, you can make a "riskless profit" from buying and selling apples between different markets.
There are some
big hedge funds that make almost all their money off arbitrage. But, despite this simple example, arbitrage is mathematically
complex--and involves a good portion of risk if you don't know what you're doing. You probably won't be able to participate
in arbitrage directly, but you can always invest in a mutual fund that does.
Home / Markets / Industries / Industrials
Monday, June 23, 2008
Eagle Bulk Shipping Inc. Takes Early Delivery of Supramax Newbuilding Vessel
Comtex
NEW YORK, Jun 23, 2008 (PrimeNewswire via COMTEX) ----Eagle Bulk Shipping Inc. (Nasdaq:EGLE) today announced that it has taken delivery of the first of its 35 newbuilding Supramax vessels. The 53,100 dwt Wren has delivered into the Company's fleet ahead of schedule and immediately commenced a 10 year term charter, as previously announced.
Sophocles N. Zoullas, Chairman and Chief Executive Officer, commented, "The delivery of the Wren represents an important milestone for our Company. Our shareholders will now begin to realize the benefits of our well-timed Supramax newbuilding program, as the Wren is one of 35 new vessels set to join the fleet between now and early 2012.
"It is noteworthy, as well, that we were able to take delivery of the Wren 70 days ahead of the contract delivery date of August 30th, thereby increasing cashflow in the second and third quarters for our shareholders. This is a tribute to our partners at the Sinopacific Shipbuilding Group, one of the premier shipyards in China. We applaud their efforts and look forward to many years of a productive working relationship going forward."
About Eagle Bulk Shipping Inc.
Eagle Bulk Shipping Inc. is a Marshall Islands corporation headquartered in New York. The Company is a leading global owner of Supramax dry bulk vessels that range in size from 50,000 to 60,000 deadweight tons and transport a broad range of major and minor bulk cargoes, including iron ore, coal, grain, cement and fertilizer, along worldwide shipping routes.
Forward-Looking Statements
Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although Eagle Bulk Shipping Inc. believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, Eagle Bulk Shipping Inc. cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.
Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in our vessel operating expenses, including dry-docking and insurance costs, or actions taken by regulatory authorities, potential liability from future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by Eagle Bulk Shipping Inc. with the US Securities and Exchange Commission.
Visit our website at www.eagleships.com
This news release was distributed by PrimeNewswire, www.primenewswire.com
SOURCE: Eagle Bulk Shipping Inc.
Eagle Bulk Shipping Inc. Alan Ginsberg, Chief Financial Officer +1 212-785-2500 Perry Street Communications, New York Investor Relations / Media: Jon Morgan +1 212-741-0014
(C) Copyright 2008 PrimeNewswire, Inc. All rights reserved.
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