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Would be nice to provide a new targeted "Effective Date".
FORT WASHINGTON, Pa., Jan. 31, 2018 /PRNewswire/ -- As previously announced, Walter Investment Management Corp. (the "Company") (NYSE:WAC.BC) received approval of its prepackaged financial restructuring plan (the "Prepackaged Plan") from the United States Bankruptcy Court for the Southern District of New York on January 17, 2018. Also as previously announced, the Company will emerge from Chapter 11 on such date that the conditions to the Prepackaged Plan are satisfied (the "Effective Date"), which date was previously anticipated to occur on or before January 31, 2018. The Company announced today that, while it remains on track to complete the work necessary to satisfy such conditions, the Effective Date will not occur prior to February 2, 2018.
Exit of Bk Feb 2nd
Good luck all
As part of its Chapter 11 reorganization plan, Walter Investment Management Corp. will pay investors in its senior unsecured notes a yield of 9.00 percent while extending the maturity on the investment by three years.
According to a new filing with the Securities and Exchange Commission, the unsecured notes previously matured in 2021 and carried a yield of 7.88 percent.
Walter, the parent of mortgage servicer Ditech Financial, lists 12 guarantors that are on the hook for the payments, including Ditech and its reverse lending affiliate, Reverse Mortgage Solutions.
Eventually, according to the form T-3/A, Walter will be renamed Ditech Holding Corp.
https://www.insidemortgagefinance.com/imfnews/1_1283/daily/investors-in-walter-investment-get-a-9-percent-note-rate-1000044625-1.html?ET=imfpubs:e10454:14761a:&st=email&s=imfnews
Just repeat dilution just as you said not knowing share structure, and warrants not a fan as well.
I am on sidelines waiting for things to unfold and see how it plays out. Shorts knowing the financial are terrible they going to hijack the price and short it at will.
It is too risky for me thats why i stepped out for now. I hope all the opposite happens and shareholders make money here.
Best regards,
Hello Yanksgirl.
People on message boards are always a bit reluctant to give someone else advice for investing. (At least they should be) For two main reasons, I/we do not have any idea your risk tolerance and your investment time horizon.
Positives: I for one am certainly curious as to what the restructured share price will look like in a few days. This entire effort by WAC is meant to provide some "Recovery" to the shareholder. So logic tells me, if you are holding shares under One buck, who is the first to recover? Plus, the valuations put the PPS at somewhere between 1.50 and 2.50.
Negatives: I am not a big fan of warrants. Most warrants I have ever owned have expired worthless. Hopefully WAC is the exception. Also, Q4 2017 earnings will not be pretty. December alone shows a net loss of 134 million. Q1 2018 will still show WAC at a net loss as they exit BK at the end of January and finish the restructure the remaining months of the quarter. Operational functionality and a return to positive earnings may not be visible until Q3.
https://seekingalpha.com/filing/3841890
I posted the link. Lots of information. House keeping items?? What did you see that stands out the most?
This Amendment to Form T-3 (the “Amendment”) amends and restates the Application for Qualification of Indentures under the Trust Indenture Act on Form T-3 (File No. 022-29050) (the “Form T-3”) originally filed with the Securities and Exchange Commission on November 6, 2017 and (i) attaches certain exhibits previously omitted from the Form T-3 (including a form of indenture) and (ii) updates certain itemized information to the Form T-3.
http://secfilings.nasdaq.com/filingFrameset.asp?FilingID=12499369&RcvdDate=1/29/2018&CoName=WALTER%20INVESTMENT%20MANAGEMENT%20CORP&FormType=T-3/A&View=html
New filing 1 hour ago interesting
To all current shareholders if you’re PPS avg is @ .72 does it make sense to hold now? I’m confused on dilution after 1/31 execute date. Any guidance much appreciated
4Q 2017 Earnings will be brutal...
https://seekingalpha.com/filing/3841890
For a stock trading at half its value... Almost as if shedding 800 million was irrelevant...
Good to hear. Thanks Rocko!
Thank you like wise.
Good luck! I hope you find more good investments. :)
I'm still in. Nothing has changed. 8-K filings are required by SEC. Book value looks to be $1.30-1.50. We're trading at 50% of that.
Hey rock if you still in good luck i am completely out.
Wish you and rest make money on this way.
Best to all
Im sure some here sold out smart move i will as well today
Rock, what’s your thoughts on yesterday’s filing?
Action hate to say it this new filing nothing positive loom and doom i rather they do not emerge of bk their continued filing making investor's get out i almost did today but like an idiot did not said give it time. With the new 8k filing we going to see a dip tomorrow fthem its turning like BCEI
Forgot to mention few weeks prior to court approval it was pumped from .70 all the way to 4 dollars and retracted back to
.50 and below i got out at 2 did not want to be greedy there was also huge options contracts that were to expire definetly was pumped to get out with profit.
I looked at options for WAC contracts expired on the 19th there are opyion contract for feb as high as 3 bucks.
I will be out on any pump i feel it will happen prior to finalization seems its always cooked in in most BK so everyone is happy.
Gl
Super nice to see some level heads here for this particular message board and solid DD. COOL!
RockHard - while I agree shares are undervalued, in my opinion, you're over estimating the value of this company. Even after restructuring and elimination of $800m of debt, which results in reduction of interest expense by approximately $60 million, the company is still NOT profitable. They continue to lose money. So those losses will continue to reduce book value of the company.
The key here, is to project when, or if, the company will start losing money and when they will turn around and make money. Otherwise, to value a company based on book value, while its book value continues to diminish due to losses isn't the best valuation approach.
I do believe the company is undervalued at these levels, but the likely 'fair value' is around $1-1.50 at most, not $1.50-2 or anything beyond. That is why I said that we won't know too much until Q2 earnings are released, at which point restructuring and abnormal professional fees will be behind us. I own a lot of shares and am optimistic, but I'm looking at this realistically.
I was in BCEI same thing they offered warrrants. 13.5 percent of new common however after looking into it deciding what to do. I did not care for the warrants because all what,warrants is if you want to buy the stock @ x$ amount and exersize the warrants at later time why i want to buy it at higher price , for me i decided to sell my shares as i was up prior to emergence of bk. Talked to my broker that im better off.
I will wait for a spike to a dollar plus snd get out. I am up bought it at .40 i did not buy it when it was 10 bucks 5 bucks zorry for anyone who got screwed .
I have been there this is the first timr im on the other side of the fence.
For somone who was in this stock snd bought it at much higher price it would make sense for them to stay.
Wish all the best
Cool. I work for a bank that sells a shit load of mortgages to Ditech. That’s the only reason for my investment here. bought into the stock a little too soon. Thanks again for your input. Much appreciated.
yes, after the effective date it should signal all clear and the price should increase. Truthfully, I have share losses from a couple years ago in this issue and they are substantial, so hopefully this management will do a better job for all involved here. If you use the old prices and the 1/8 share equity gets here, that's $2 when all the bad was going on... I was in this at $17 share... nothing good, big growing debt, mounting issues. They relieved $800 million and although there's still great pressure to produce obviously they have a much better perspective and a stronger hand on the controls, I truly believe this time they can get this rolling in the right direction and operating positively once out the gate.
After dilution, the pps would still be 1.50-2.00? After the “effective date” concerns me. Hold a large bag here. Bought before they announced the BK. Willing to wait a year if need be.
Appreciate your thoughts.
These shares are very undervalued here... once this company emerges from the prepackage with a clearer picture, much lower debt, and some time to get itself up and profitable again... today's measly $0.81 will launch to $1.50 to $2.00 almost instantly. And from there it could well reach $5.00-$10.00, or even more within a few years. Now that's 6X to 12x it's current level... IMHO that's not too bad. The downside 0 is always possible, but that is a one vs. six to twelve times ratio to it's upside... plus who knows what, and we have those warrants. So I ask myself today is this $0.80 risk premium worth taking with this Management? I think so, therefore count me in for $5K, If this goes well I will make back my older losses in WAC along with a handsome profit. so if you have or are deciding on a position let me know your thoughts and your position. -GLTA
Thanks Rocko!! Appreciate the DD!
I believe warrants give you the option to take additional shares if certain milestones are met. Those milestones are outlined in the restructuring agreement. Warrants WAC is issuing have a 10 year life, so anything could happen.
There will be two classes of warrants, as follows (I don't follow the "exercise price" provision, so if anyone could clarify, would appreciate it) (https://www.sec.gov/Archives/edgar/data/1040719/000119312517315942/d477008dex101.htm):
The Series A Warrants shall be subject to a governing warrant agreement (“Series A Warrant Agreement”), and each such warrant is exercisable for one share of New Common Stock.
The number of Series A Warrants shall be determined at the effective date of the Plan such that, in the aggregate, the holders of Convertible Notes and the Existing Shareholders (through the Series A Warrants and shares of New Common Stock issuable to them under the Plan) will receive 50% of the incremental total equity value of the Company above $325 million (the “Series A Threshold”) (after giving effect to the conversion of the Preferred Stock).
Exercise Price
The exercise price per Series A Warrant shall be set at a price per share of New Common Stock such that the Series A Warrants are “in the money” at and above the Series A Threshold (expressed on a per share basis).
The Series B Warrants shall be subject to a governing warrant agreement (“Series B Warrant Agreement”), and each such warrant is exercisable for one share of New Common Stock.
The number of Series B Warrants shall be determined at the effective date of the Plan such that, in the aggregate, the holders of Convertible Notes and the Existing Shareholders (through the Series B Warrants, the Series A Warrants and shares of New Common Stock issuable to them under the Plan) will receive 60% of the incremental total equity value of the Company above $500 million (the “Series B Threshold”) (after giving effect to the conversion of the Preferred Stock).
Exercise Price
The exercise price per Series B Warrant shall be set at a price per share of New Common Stock such that the Series B Warrants are “in the money” at and above the Series B Threshold (expressed on a per share basis).
That’s where I’m lost. I’ve never owned warrants so don’t know wth to do.
I would of thought it makes perfect sense as you will get warrants.
does it make sense to hold onto our shares until after the new “effective date”?
Got it
Thanks again
It doesn't matter how many shares you will have. Let's put it this way.
You have 100k shares, which represents 0.3% ownership of the current common holders (100,000 / 38,000,000 shares).
38,000,000 shares will represent 13.5% ownership of the company.
YOUR ownership = 0.3% x 13.5% = .0355% ownership of the TOTAL company
So it doesn't matter if you have 10000000000000 shares that represent .0355% ownership, or if you have 1 share.
So my 100k shares wikl be worth 13.5 percent of issued common so what happenes to the shares how many will be left of ny 100k shares.
Thanks again
Hi thanks makes sense now :)
To summarize:
Senior note holders get 73%
Convertible note holders get 13.5% (plus warrants)
Current common stock holders get 13.5% (plus warrants)
Total = 100%
Senior note holders do NOT get warrants.
Yes, you are correct in that that's what the 8-K says. But current bond holders get 73% ownership. See below from 8-K.
The Company will issue to holders of Senior Notes Claims:
• $250 million aggregate principal amount of secured second lien notes subordinated in right of payment to certain Senior Obligations (as defined in the indenture for the New Second Lien Notes) having the terms described in the Prepackaged Plan; and
• $100 million aggregate initial liquidation preference of Mandatorily Convertible Preferred Stock having the terms described in the Prepackaged Plan, convertible into 73% of the total number of issued and outstanding shares of New Common Stock as of the Effective Date subject to dilution by shares of New Common Stock issued or issuable pursuant to the Management Incentive Plan and by shares of New Common Stock issued after the Effective Date, including shares of New Common Stock issuable pursuant to the New Warrants.
In other words, Senior Note holders get 73% of common stock. Existing common holders get 50% of the remaining (50% x 27% remaining = 13.5%)
Where in the 8k it mentions common shareholders will only get 13 percent.
What i read equity holders get 50% of the newely issued common stock.
I am certainly down w/ your analysis. One thing for certain we all gonna find out real soon.
Not sure I agree. Current common holders will own 13.5% of the company. Company's book value (for what it's worth), will be approximately $500-600m, which means book value allocated to common holders will be $65-80m.
So, if you currently own 370,000 shares (or 1% of total common shares), you own 1% of the company, and are thus entitled to 1% of the book value. That lands at $650-800k. However, your current 370,000 shares are only worth $315,000.
So while the structure / number of shares may change, the book value that will be allocable to existing shareholders will continue to the be same. Plus we get warrants.
So, in my opinion, nothing has changed.
I think we'll continue to hover around these levels until 1/31/18. Then when there is more clarity, we'll take a little leg up. Then after 10-K is filed, and we see Q4 performance, possibly another movement (up or down). Then Q1 report will be unclear, since it will have a ton of professional fees, etc. I don't think we'll see true operations of the company until Q2 report will be issued at some point in July / early August. Around that time, we may trend towards book value (whatever it will be at that point).
Thanks for your input.
Thanks i read it was confusing the 50% new common it is not very clear hope regardless we are still in the money once all said and done.
Regards,
Warrants and current price puts a bit of a cloud on things. Which is why I believe stock did not launch yesterday. I believe the new issuance will contain some elements of a reverse split to bring up the price to avoid de-listing issues.
The following:
Excerpt: Solely if the class of Convertible Notes claims votes to accept the Prepackaged Plan: each holder of a Convertible Note will receive its pro rata share of (i) New Common Stock representing, in the aggregate, 50% of the New Common Stock issued, subject to dilution by shares of New Common Stock issuable upon conversion of the Mandatorily Convertible Preferred Stock, shares of New Common Stock issued or issuable pursuant to the Management Incentive Plan and shares of New Common Stock issued after the Effective Date, including pursuant to the Warrants, and (ii) 50% of two separate classes of 10 year Warrants, on the terms set forth in a term sheet to the RSAs; and each holder of the Company’s existing common stock will receive its pro rata share of (i) New Common Stock representing, in the aggregate, 50% of the New Common Stock issued, subject to dilution by shares of New Common Stock issuable upon conversion of the Mandatorily Convertible Preferred Stock, shares of New Common Stock issued or issuable pursuant to the Management Incentive Plan and shares of New Common Stock issued after the Effective Date, including pursuant to the Warrants, and (ii) 50% of each class of Warrants.
I don't see anything changing form what we already know. The way I read it new common stock will be issued for old common stock. Also warrants will be issued as well.
Share Information
As of December 31, 2017, the Company had 37,373,551 shares of common stock issued and outstanding. By operation of the Prepackaged Plan, on the Effective Date, all shares of the Company’s common stock will be cancelled and will permanently cease to exist, and the New Common Stock will be issued as set forth in the Prepackaged Plan.
On the Effective Date, the Company expects to issue New Common Stock, New Warrants and Mandatorily Convertible Preferred Stock as described above. The final number of shares of New Common Stock, New Warrants and Mandatorily Convertible Preferred Stock will be determined prior to the Effective Date. The Articles of Amendment and Restatement of the Company, which will be filed with the Department of Assessments and Taxation of the State of Maryland on or prior to the Effective Date, will include the amount of authorized shares of New Common Stock and Mandatorily Convertible Preferred Stock which will be determined prior to the Effective Date.
What does common shareholders get since they canceling common issuing new stock 8k out
Perspective for today's disappointment. Prior to announcing the hiring of BK firm back in March of 2017, WAC stock exceeded $3. Today, after an announcement of an Approved restructure plan, one the sheds 800 million in debt the stock can't even muster ONE DOLLAR! Pretty pathetic!
1.5 million shares we still at a buck hope Gldman sachs starts loading up :)
Over a Million shares. Volume Picking Up. Shorts you got lucky!! Now get out of the way. :)
Excuse my typos multitasking:)
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