Strong stock price performance triggers conversion of preferred shares into common shares. ESEA recently notified Blackrock that it intended to issue a notice of redemption no earlier than July 9, 2021, and Blackrock converted the preferred shares into common shares at $14.05/share in June, as Preferred Friends Investment had earlier on June 15th. A total of 453k common shares were issued and the current share count is ~7.24 million shares.Updated timing of new builds. Contracts signed for two Eco design fuel efficient 2,800 TEU containerships to be built at Hyundai Mipo Dockyard Co. in Korea at a total cost of ~$76 million. We estimate that a 10% deposit of $7.6 million will be paid in 3Q2021, with payments of $3.8 million in 2Q2022, $7.6 million in 3Q2022, $7.6 million in 4Q2022, $3.8 million in 1Q2023. Payments upon delivery of $22.8 million will be due in 1Q2023 and 2Q2023. A combo of operating cash flow, debt and equity will fund the new builds.Visibility into next year is the highest in more than a decade. No change in 2021 EBITDA estimate of $44.1 million based on forward cover of 89% and TCE rates of $17.4k/day. No change to 2022 EBITDA estimate of $69.7 million based on forward cover of 55% and TCE rates of $22.3k/day.the prospects remain strong for the upcoming renewals on four feeders and one intermediate that expire before yearend 2021. The Contex index for 4,250 TEU vessels, like the Oakland, has moved up into the more than $65.0k/day range. Based on recent comments, our estimates might be conservative.Capital structure improving due to strong cash flow. Debt of $0.9 million was prepaid in May and all of the convertible preferred stock was converted following the redemption notice. With improved visibility and strong cash flow, net debt might be close to zero even after two new builds and a regular dividend and/or special dividend might be paid by yearend 2021.Maintain Outperform rating and price target of $30.00/share. Our container market outlook stays favorable and numerous longer term charters at higher rates create forward cash flow visibility. Even though the stock was up 325% in 1H2021, the stock has dropped ~17% in July. We believe that the current valuation remains attractive and the risk/reward profile warrants a positive rating. Moreover, improving operating results and declining financial leverage should allow shareholder friendly moves, like paying a regular and/or special dividend. Read More >>