Odyssey Marine best seen on TV, not in your portfolio

The Jaded Consumer

The Jaded Consumer recently submitted an article at Seeking Alpha with the above title, which the editors decided to rename " The Best Way To Play Odyssey Marine And Shipwreck Exploration".

When I started writing the article, I wasn't yet thinking about the long/short prospects of Odyssey Marine being shorted in favor of a major offshore oil and gas support services provider such as Oceaneering International or Subsea 7, which use some of the same (or better) equipment and skill sets but do so in a business model that has actually been proven to make a profit.

I was thinking that while it's cool to watch underwater exploration televised by the Discovery Channel, it really sucks to " stand under a cold shower tearing up £50 notes

Comments quickly arrived from those who watched OMEX – a crowd that surely has interest in Odyssey's yarn about the almost-in-hand treasure, or it wouldn't be watching OMEX news.

The thrust of the comments was that (a) Odyssey is about to pull up one (or more) of the wrecks, and (b) it's a ton of money on that wreck (or those wrecks) and it'll push shares to $____ (number varies with enthusiasm of advocate).

The comments thus assume that Odyssey is capable of salvaging a wreck at a net profit. Built into this assumption are a several important axioms, the doubt of which would considerably impair the the bull case:

(1) Odyssey is capable of recovering from the sea floor valuable cargoes, substantially intact, despite their being lost for many years,

(2) Odyssey will be able to prove some ownership interest in one or more of these valuable recoveries,

(3) Odyssey's timeline to proving its claim will be within a commercially reasonable time frame, and won't require multiple new share issuances to keep the enterprise's lights on (and attorneys paid) while litigation drags on for years as it did with Mel Fischer, and

(4) Odyssey's cost to recover property and defend a claim to title will not only cost so much less than the value of the recovered property, and be so quick that dilution can be ignored as a risk, but will provide so much upside that the risk of the shares going nowhere forever while OMEX burns investors' cash having fun hunting treasure around the world is really outweighed by the huge upside.

Of these axioms, (1) is probably the safest so long as OMEX is able to raise funds in the public markets to keep trying.

The others vary considerably by project.

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