On July 6, dry-bulk shipping specialist Seanergy Maritime (NASDAQ:SHIP) announced the completion of a spinoff of United Maritime (NASDAQ:USEA). That saw USEA stock make its debut on the Nasdaq to resounding enthusiasm. Today, it’s thundering to a gain of more than 125% as of this writing.
Seanergy bills itself as one of the only pure-play capesize shipping firm listed in the U.S. capital markets. According to Mitsui O.S.K. Lines (OTCMKTS:MSLOF), capesize vessels represent the “largest class of bulkship that can carry any type of cargo, such as iron ore and coal in main.” Mitsui also points out that these ships are called “capsize” because they “cannot pass through the Panama Canal and have to go around the Cape of Good Hope to sail between the Pacific and Atlantic oceans.”
Per United Maritime’s press release, the company began operations with one capsize dry bulk vessel. Looking forward, it expects to expand into different shipping sectors and pursue a diversified business model.
From a market performance perspective, the bullish support for USEA stock is significant. Major indices have been battered this year due to soaring inflation and brewing recession fears. However, the stock’s impressive debut may help ease concerns.
USEA Stock Points to Possible Pivot
Setting aside the debut, sentiment for shipping companies has been dour this year. For example, Seanergy — although up about 6% today — is down nearly 22% year-to-date (YTD).
Other rivals in the shipping space, including ZIM Integrated Shipping Services (NYSE:ZIM) and Danaos (NYSE:DAC), have also suffered significant losses. Those stocks are down approximately 26% and 19% YTD, respectively. They’re also up conspicuously today, likely trading in sympathy with USEA stock.
A few months ago, analysts took a dim view of the shipping industry. At the time, many headwinds — including China’s lockdown policies, oil demand and the Federal Reserve’s hawkishness — hurt the sectoral outlook. Now, although many of these challenges are still loitering, the sharp rise in USEA implies that Wall Street sees some light at the end of the tunnel.
All Eyes on China (Again)
USEA stock brings several lines of encouragement to the table. Now, though, analysts are likely focusing on China again. Unfortunately, reports indicate that Covid-19 cases recently doubled in a day in Shanghai. That’s fueling concerns that the city, which is an important economic hub, could enter lockdowns once more.
With that in mind, prospective investors will need strong conviction and some good fortune in order to play United Maritime successfully.
On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.