DryShips (Nasdaq:DRYS) Crushed on Morgan Stanley (NYSE:MS) Downgrade

Morgan Stanley (NYSE:MS) downgraded DryShips (Nasdaq:DRYS) on Monday, citing what they considered a bad deal, where they're going to spend $800 million to acquire 12 oil tankers.

They believe Dryships overpaid for the tankers by close to $50 million.

Morgan Stanley shipping analyst Ole Slorer said, "The transaction significantly changes (DryShips') asset profile - in a negative way, in our view. We believe it has become difficult to value in light of its recent move."

Slorer doesn't like the overall maritime crude-oil transport sector either, saying he doesn't believe it'll reach bottom until 2012.

Morgan lowered their rating from "Overweight" to "Underweight" on Dryships, which closed Monday at $5.19, down $0.30, or 5.46 percent.