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Chart: Will history repeat itself again?
Once again the PPS is at the end of a symmetrical triangle and has to choose between up or down.
IMO it will be decided in the next 3 days...
Chart courtesy of StockCharts.com
In the 3 year chart I count 9 symmetrical triangles, and each triangle with the support line as bottom line has always been broken to the top!
Will the PPS do the same again this time?
Chart courtesy of StockCharts.com
RSI was reset, but still bullish and ready for a new surge, Accum/Dist is at new all-time high!
All JMO
Correct, it is a rolling period, but now the last testing event was more than 3 years ago. So it is a "sliding window", and at the moment there was no testing event within this 3 year window!
03/19/2012 ----| |---- 03/20/2015 (last Friday)
^ |<--- 3 year window ---->| ^
| | | |
| |
Testing Event Perhaps next testing event
(ownership change allowed IMO)
WMIH could buy only the "servicing rights" from WMILT for the returned mortgages, if the theory comes true... Possible?
Let's assume this will happen, then EVEN FOR US (escrow holders) a lower PPS of WMIH would be better in a "stock for value" transaction. The lower the PPS the more WMIH shares for each P/K/Q escrow if the value is constant, right?
Hmm, but I love the idea:
WMIH's target is ~ "the original debtors estate"
against FDIC, in its capacity as receiver for WMB
That means AGAINST FDIC-R
It is, what it is!!!
As a creditor "of WMB"
M&A can be done today, no need to wait for shareholder meeting IMO because
1) KKR can exercise their warrants today since 03/19/2015 passed by yesterday (they agreed not to exerciese them until that date)
2) Reincorporation in Delaware is a sure thing because B-preferreds have voting power and more than 57% and the holder of the B-preferreds have agreed to VOTE FOR the reincorporation
3) The number of authorized common shares is not enough at the moment to convert all B-preferreds when an qualified acquisition takes place, but that is no problem because of
(d) If upon the applicable Mandatory Conversion Date the shares of Common Stock issuable upon such Mandatory Conversion Date exceeds the number of authorized shares of Common Stock (that are not otherwise reserved on the Issue Date), such shares of the Series B Preferred Stock shall automatically convert, to the fullest extent possible, into all authorized shares of Common Stock (that are not otherwise reserved on the Issue Date) available for issuance on a pro rata basis using the applicable conversion price on such Mandatory Conversion Date (the “Partial Conversion”). Shares of Series B Preferred Stock entitled to be converted but not actually converted in the Partial Conversion (such shares, the “Unconverted Shares”) shall remain outstanding and shall continue to be entitled to all the rights and preferences of the Series B Preferred Stock, including, without limitation, the rights and preferences set forth in Sections 3, 4, 6, 7, 12 and 15. For the avoidance of doubt, shares of the Series B Preferred Stock converted into shares of Common Stock in the Partial Conversion shall not remain outstanding and shall not retain the rights and preferences of the Series B Preferred Stock.
(e) Upon the Reincorporation or such earlier date that authorized shares of Common Stock sufficient to effect the Mandatory Conversion of the Unconverted Shares are available (the “Remainder Conversion Date”), the Unconverted Shares shall automatically convert into shares of Common Stock using the applicable conversion price on such Mandatory Conversion Date.
This should answer your question
http://www.sec.gov/Archives/edgar/data/933136/000119312514448569/d839695d8k.htm
On December 19, 2014, WMI Holdings Corp. (the “Company” or “WMIHC”) entered into a Purchase Agreement (the “Purchase Agreement”) with Citigroup Global Markets Inc. (“Citi”) and KKR Capital Markets LLC (“KCM” and, together with Citi, the “Initial Purchasers”), an affiliate of KKR Fund Holdings L.P. (“KKR Fund”) and KKR Management Holdings L.P. (“KKR Management”), which is attached hereto as Exhibit 10.1 and is incorporated herein by reference
Correct, but KKR could exercise all their warrants tomorrow. But I think they will not. IMO they exercise the warrants at the same time an M&A is announced and the B preferreds are converted.
"Wall Street" doesn't know much about WMIH apart from some insiders like Kevin and some other hedge funds, and the MMs playing their games. Last year the PPS increased in anticipation of the 2nd year POR effective date and then NOTHING happened!
This year, nearly no increase in PPS, but perhaps on Monday M&A news will get released and the PPS skyrockets. Who knows...
For me there is a reason why they WAITED for 3 years instead of buying a small company in the first and/or second year after POR effective date.
Something big will happen IMO
"Wall Street" will start to take a great interest in WMIH after M&A and up-listing to NYSE or NASDAQ and we see a volume of more than 10 or 20 million shares/day. THEN we will see a BIG spike in PPS.
Just look at the Accum/Dist line for the last 3 years in the chart below! Do you know ANY OTHER stock with a comparable Accum/Dist?!? I guess not!
http://scharts.co/18K9tny
You are right, rinse and repeat is not a possibility except they wait another 3 years when a new ownership change can happen, OR they manage to raise funds without changing the ownership structure...
Debt would be one possibility, or as AZCowboy suggested a "stock for value" swap for the escrows IMO
I hope the simplest answer is the reason: They are just WAITING for 03/19/2015 (third year after POR effective date) to pass by because on 03/20/2015 or later they can trigger a new "Testing Event" (ownership change) without jeopardizing the (at least) $5.9 bln. NOLs.
Friday after-hours or Monday pre-market could become very interesting IMO
Chart-Update
Based on your question, I put up my favorite $WMIH chart, the 3-year-daily (actually only 2.5 years to focus on the important things)
As you can see, the green line acts as strong support for the PPS. This support was tested several times (green circles), and the PPS bounced always off. So I think it could be possible that this support line gets tested once again (without M&A news) which would be in the range between $2.15 and $2.20. But in anticipation of M&A news or right before the shareholder meeting, the PPS can easily run to the range between $3.50 and $3.70! The RSI was "reset" this week, and Accum/Dist line is at its all-time high! The MA-50 approached also this support and turned upwards! It may cross the MA-200 in a few weeks! This is called "Golden Cross" (http://www.investopedia.com/terms/g/goldencross.asp) and could also boost the PPS! Very explosive IMO
Chart courtesy of StockCharts.com
You are right but IF the escrows OWN the mortgages, WMIH could buy only the servicing rights and service the mortgages for us (the escrow owners). Escrows would receive a one time payment for the servicing rights and then quarterly payments. And perhaps the mortgages get liquidated step-by-step. Could be a possible way IMO
http://www.bizapedia.com/de/THACKERAY-III-BRIDGE-LLC.html
And with Google all I can find is the following:
https://www.google.de/?gws_rd=ssl#q=%22Thackeray+III+Bridge+LLC%22
Tanja, thank you so much for your great contribution here and I hope the "Men in Black" won't visit you tonight for digging too deep ...
I am very anxious to the FDIC's answer!
Thanks tanjazielman, this could explain my post from July 2014:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=104593627
Especially my last question...
If the alternate outcome would have been NO STAKE in WMIH for "old equity" at all, then I think it was a good recommendation, and one could say "fair & reasonable". Don't get me wrong, I am pro-escrow, and think we will get some (much?!?) money, but only because he recommended to sign the releases you cannot deduce that escrows will be paid for sure...
IMO he wasn't allowed to sell/buy while being a member of the EC and privy to non-public information.
He already made a huge gain with the "free" shares he received for being a BOD member. When can they sell their first shares they got? If I remember correctly in March 2015?!?
PURE THEFT:
Fannie Mae’s situation was totally different. In the winter of 2000, it had agreed with Treasury, and pledged publicly, to maintain sufficient liquidity to enable it to survive at least three months without access to the debt markets. As a consequence of this pledge—to which it had adhered—unlike all of the other companies rescued by the Fed or the Treasury during the crisis, Fannie Mae never experienced a threat to its solvency because of difficulty rolling over its maturing debt, nor did it need to sell assets at depressed prices to survive. The company never experienced a market crisis. At the time it was put into conservatorship, Fannie Mae’s capital significantly exceeded its regulatory minimum. Fannie Mae’s “rescue” was a policy choice by Treasury, with its timing determined by Paulson.
The chart looks solid, accum/dist at new alltime-high, and only 9 trading days until 3-year POR effective date! Last year, we had a nice up-run, but then nothing happened, but this year I think an M&A will be announced as soon as 03/20/2015 or the following weeks...
The opposite of a "Death Cross"
http://www.investopedia.com/terms/g/goldencross.asp
A Death Cross occured in August 2014 and after that the PPS went down:
http://www.investopedia.com/terms/d/deathcross.asp
After the (expected) Golden Cross I hope the PSS will jump above $6 or more...
Golden cross in a few weeks! Shorts will get toasted soon
I don't think so, volume is too low for after-hour news IMO
Looks to me like a sound correction before PPS will jump above $3
Only 10 business days until 3 year POR effectiv date...
...and then the M&A can happen IMO (and KKR can exercise their warrants)
03/19/2015 <----- 3 year POR effective date
Just wondering why we don't see any buying pressure!
Fannie Mae: FactChecking Michael Stegman
http://www.valuewalk.com/2015/03/fannie-mae-factchecking-michael-stegman/
They nailed it...
[...]
We’re encouraged that Mr. Stegman is finally being forced to address critical issues related to the undercapitalization of Fannie Mae and Freddie Mac, and how the government’s illegal Third Amendment Sweep is actually exacerbating this problem by taking all of Fannie and Freddie’s profits. But as it has been in the past, his analysis is wrong, and in conflict with HERA, which is the statute that actually governs the conservatorship.
[...]
Policymakers are debating what to do about Fannie and Freddie, but we have a GSE Reform law called HERA. Right now, HERA is being violated by the Treasury, and it was violated by Director Watt’s predecessor Ed DeMarco, who famously admitted to this at a Washington policy conference last year . It’s not too late to reverse course. FHFA can begin rebuilding capital at Fannie and Freddie now, and has the statutory authority to do so under HERA. This would be a good first step.
Let's wait a bit, but you could be right, too many possibilities to interpret this short article...
Yeah, that's good news also in my opinion!!!
U.S. Treasury says speed up reduction of Fannie, Freddie assets
http://www.reuters.com/article/2015/03/05/usa-treasury-gse-idUSW1N0VL00K20150305
(Reuters) - A U.S. Treasury official on Thursday pushed for a faster reduction in the most illiquid assets held by Fannie Mae and Freddie Mac, and said the only way to fix the government-controlled mortgage finance firms was through legislative reform.
[...]
"The closer the GSEs can come to transferring the majority of risk to private market participants, the better," Stegman said in prepared remarks at a Goldman Sachs conference. (Reporting by Michael Flaherty; Editing by Paul Simao)
tanjazielman, what's your take on this one?
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=111428337
The calculation is correct IMO but my question is...
In addition, from 2005 to 2008, Washington Mutual made certain loan level representations and warranties in connection with approximately $165 billion of residential mortgage loans that were originally sold or deposited into private-label securitizations by Washington Mutual. Of the $165 billion, approximately $78 billion has been repaid. In addition, approximately $49 billion of the principal amount of such loans has liquidated with an average loss severity of 59%. Accordingly, the remaining outstanding principal balance of these loans as of December 31, 2014, was approximately $38 billion, of which $8 billion was 60 days or more past due. The Firm believes that any repurchase obligations related to these loans remain with the FDIC receivership.
Nice paraphrase for saying "the government wants to cover up the unlawful things it has done"...
No opinions on this Ocwen PR?
Is this our "deal"?
http://finance.yahoo.com/news/ocwen-sell-mortgage-servicing-rights-220244762.html
Mortgage servicer Ocwen Financial Corp (OCN.N) said it would sell residential mortgage servicing rights on $45 billion of Fannie Mae loans to an undisclosed buyer, sending its shares up 5.5 percent in extended trading.
[...]
Ocwen said on Monday it was on track to sell servicing rights on agency loans of about $55 billion, including the two deals, in the next six months to raise around $550 million.