Sunken Profits

Community Comments

Nothing captivates like the prospect of sunken treasure. Skeletons adorned in gold and silver sitting on treasure chests at the bottom of the ocean are as archetypal as, say, the fairy godmother. And they’re about as likely to make you rich.

So when news broke recently that professional treasure hunters Odyssey Marine Inc. had discovered 17 tons of silver coins as well as gold coins and other artifacts somewhere between the coasts of England and Spain, it sounded like fodder for the plot of the next “Pirates of the Caribbean” movie.

And yet the publicly held Odyssey’s stock (NASDAQ:OMEX) experienced a fairytale-like transformation. After sinking to a low of nearly $1.50 per share the year before, Odyssey’s share price shot to $9.45 on the day the find was announced to the public.

In a single day, the company’s fortune seemed to turn with media reports of some $500 million worth of treasure, a claim Odyssey is refusing to confirm as it continues to process the hundreds of plastic buckets filled with treasure it’s brought to the surface. While the company says it is still investigating the ship’s identity, it confirms the vessel is from the colonial era. Most speculation points to the Merchant Royal, a ship that sank in 1641.

The sudden optimism on Wall Street was perhaps extreme — Odyssey’s share price has fallen to around $6 since the initial find. The company struggled for some time before the find and operated at a loss in 2005. While there reportedly is yet plenty of sunken treasure to be found — Unesco estimates more than 3 million ships lie at the bottom of the world’s seas and oceans — the process of retrieving the treasure from the deep is no easy matter.

Even with Odyssey’s underwater robotic equipment giving it a leading position in the erratically profitable historic salvage sector, work for salvagers remains capital intensive, legally tricky and perilous to life and limb.

Wanted: Daredevil Investors

“Deep-ocean marine archaeology is speculative and exceptionally high risk,” warns Odyssey corporate communications officer Mary Catherine McCoy. “It really takes almost a daredevil attitude,” adds Hal Eren, a Washington, D.C.-based lawyer with expertise in international water rights.

While that daring is reflected in the basic operations of treasure-hunting companies, it is also — to a lesser degree — needed by the investors who support them.

• Share
  • Digg This
  • del.icio.us
  • Newsvine
  • Facebook
  • Reddit
  • Furl It
  • !Y My Web
  • Google
• Email
• Print

Recommend This

Community Comments