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If there is no buyout, there is NO WAY the preferreds will get full value. The only way they will get full value is if there is a buyout, which I still think will happen, or if they were to liquidate everything(not going to happen) and have enough $$ to pay the preferreds in full.
There is absolutely no guarantee that preferreds will be paid in full or even close to in full, if there is no buyout and WMI emerges from bankruptcy. When WMI emerges from bankruptcy, they could be paid at a rate chosen by the company as preferred shareholders have no voting rights at all. It says right in your link:
"Another benefit will appeal to those who like to be near the front of a line. If a company runs into trouble and seeks bankruptcy protection, holders of preferred shares take precedence over holders of common stock.
So while common stockholders often receive nothing if a company seeks bankruptcy protection, preferred shareholders may end up with a few cents on the dollar.
Of course, preferred stockholders still aren't at the front of the line -- that's where you'll find creditors, such as bondholders and even employees."
Don't get me wrong, I feel that preferreds are clearly the way to go, but there are certainly no guarantees, especially at face value.
If a buyout happens, everybody wins, but preferreds will win the most.
You got that right. The best thing that everyone could do is to write individual letters to the judge and NOT participate in a class-action.
Exactly!
Lawsuits against WMI are a waste of time and money. They might be good for PR purposes, but make sure you do not join a class-action because you could end up hurting yourself.
Just ride it out and hope for the best!
I am not going to speculate as to the payout of each stock.
I, along with many others, would be able to give you a reasonable estimate if this were a CH 7 liquidation case, but it is not. The truth is that nobody knows what each will get. Full value is out of the question. If you think that preferreds will get paid in full, while secured creditors are not getting paid in full, then you are sorely mistaken. Everyone will have to give a little whether they want to or not. It is my opinion that the preferreds will not see 50% of face value, but should see atleast 10-20%, which at current prices is more than fine with me. If all assets were liquidated in their entirety(at discounted prices), which is NOT going to happen, then preferreds would see full liquidation price, and there would be enough left over to give the commons $2-5 per share. I truly hope, for everyones sake, that we all see something, but there are no guarantees.
We'll see what happens......
Most people forget that book value is almost always far less than true market value of a company.
Examples:
If Washington Mutual Holdings, or any other company, purchased land and a building in 1988 and paid $20 million,for example, after 20 years of straight-line depreciation, the book value of those assets are zero. However, the TRUE VALUE of that land and building that cost $20million in 1988, would be MUCH, MUCH,MUCH higher than $20 million. Anyone who understands accounting knows what I am talking about. It is not uncommon for a company to go into bankruptcy with a "book value" that is only a fraction of the real assets. The value of assets in a company's financial statements are almost always far lower than the true market value.
There are also factors to consider when assesing a company's true value. You should take into consideration that there are several costs that get expensed every accounting period that are not capitalized as an asset.
"In 2007, the 30 companies constituting the Dow Jones Industrial Average had an average ration of market value to book value of approximately 4.46. The ration for Merck, one of the world's largest pharmaceutical companies, was approximately 6.0. Can you think of an important reason why Merck's market value would be six times higher than its book value?"
"Carter Hawley Hale Stores (CHHS), Inc., was one of the largest department store retailers in the US. In 1991, the company operated over 100 stores in the sunbelt regions of the country. The company's divisions included The Broadway and Emporium. During the 1980's, the company struggled financially and in February of 1991 declared bankruptcy. CHHS's February 2, 1991 wuarterly balance sheet, filed with the SEC and made publicly available, disclosed the following information.
Balance Sheet (condensed)
At February 2, 1991
($ in 000s)
Assets
Current assets $1,154,064
Property and equip,net $511,690
Other assets $89,667
Total Assets $1,755,421
Liabilities
Current liabilities $175,982
Long-term liabilities $1,852,066
Total liabilities $2,028,048
Shareholders' Equity - 272,627
Tot liab and equity $1,755,421
The negative shareholders' equity includes negative retained earnings of nearly $1 billion resulting from operating losses incurred over a number of years.
By the summer of 1991, the company's stock price had dropped to $1 per share from a 1989 high of $8. In June 1991, the following condensed balance sheet information was reported to the bankruptcy court:
($ in 000s)
-----------------------------------------
Property $1,596,312
Debts $1,112,989
Excess of property over debts $483,323
Did the financial position change this dramatically from February to June? No. Differences in reporting requirements by the SEC nd the bankruptcy court cause the apparent discrepancy. First, the property (assets) disclosed to the bankruptcy court does not include accounts receivable and debts do not include the related liabilities for which the receivables had been pledged as collateral. This accounts for the smaller asset and debt figures as compared to those disclosed in the February statement provided to the SEC.
But the striking difference is that the negative equity of $272,627,000 disclosed in the SEC report becomes a positive equity (excess of assets over liabilities) of $483,323,000 in the information disclosed to the bankruptcy court. This positive equity, divided by the number of common shares outstanding, results in a per share value of nearly $16. Why the discrepancy? The answer relates to the valuation of property. In the balance sheet submitted to the SEC, these assets are valued based on their original cost. However, the bankruptcy court requires assets to be reported at fair value (The bankruptcy court requires market value information in order to assess, among other things, the ability of the company to pay its creditors if assets were liquidated). The market value of CHHS's property, which includes some valuable land in locations like San Francisco, was significantly higher than its original cost...."
Washington Mutual Holdings is worth much more than their book value suggested on their balance sheets submitted to the SEC.
In our case with Washington Mutual, we don't have to wonder about whether the Assets and Debts reported to the bankruptcy court are accurate because the answer is, yes they are accurate. The #s disclosed to the court are the real #s and yes, there will be plenty of money to go around. Will the preferreds get paid out in full? Highly unlikely imo. Will the common-stockholders get screwed with their pants on again? Unlikely imo, but it is possible. Do I think we would all be better off if Washington Mutual were in CH 7 liquidation instead? Yes, but it doesn't pay thinking about that because they are not in liquidation, they are restructuring.
In summary, the balance sheet of a company included in filings to the SEC does not directly measure the market value of an entity. The balance sheet submitted to the bankruptcy court is the one to look at. You do not have to worry about these #s going up or down. They are as close to fair market value as you can get. So in our case, you do the math. When examining stocks in the future, make sure that you do not base your decisions on the balance sheet alone (especially if it is a balance sheet submitted to the SEC) A company's balance sheet should be used in conjunction with other financial statements, such as the statement of cash flows,to judge the market value of an entity.
I am not here to give anyone an accounting lesson, nor will I be answering questions regarding Generally Accepted Accounting Principles, nor do I think I know it all, because I certainly do not. I just wanted to share some accounting knowledge that you all might benefit from in the future.
Best of luck to everybody, relax, and enjoy your weekend!
Your frustration is justified. This whole thing smells of corruption and hidden agendas and everybody knows it. I have confidence that the end result will be atleast "more fair" than it stands right now.
My suggestion to you is, if you have $10,000 invested, I would recommend picking up a couple hundred shares of WAHUQ for security purposes. If you don't have any WAMPQ, pick some up and hold LONG TERM.
Don't worry about what other people think or if they laugh at you. This hasn't been your average bankruptcy situation from the get go, and that is why I do not believe that it is going to end like the average bankruptcy. I am a complete rookie investor, however, I realized that there are probably not going to be too many more opportunities like this in my lifetime and got in a month ago. Investing is a game of risk/reward analysis and speculation. I know I have spent $$ on a lot of stupid things that had 0% chance of a return on my money so I am proud of my purchases over the last month.
If you are a WAMU employee and lost 99% of your retirement, I give you my deepest sympathies. If you are not, just think about how all those employees and "former employees, formerly retired" that have to go find another job because their retirement funds disappeared. I am guessing that you have a lot to be thankful for, and you should appreciate what you have and live life to the fullest!
Best of luck to you!!
If this wasn't going to end up good, we would be hearing CNBC, Bloomberg, FBN, etc., all saying "Washington Mutual" every time they talk about Lehman Brothers. However, they do not do this. Something huge is going on. If there wasn't something brewing, the Media and Congress would not be so quiet about the Washington Mutual situation. They have all been told to keep their mouths shut, and that is exactly what they are doing!
Bottom line= If you are frustrated or feel uneasy, sell your shares and quit posting on this board. Keep your negativity to yourself. Pretty simple, either sell, hold, or buy more and hold. No matter which route you want to take, sit back and enjoy the ride!!!
Due some DD on the laws surrounding NOLs and you will be reconviced. If you don't want to do the research, then stay unconvinced and sell your shares.
Think again!
Thanks for the information and for attending. It is very much appreciated. Something smells, and it's JPM and FDIC.
Thanks again, best of luck, and have a great weekend!!
: ^ )
Bingo!!!
I think this is pretty standard for bankruptcy hearings and hearings in general. Everything takes longer than initially planned. I wouldn't sweat it. Trust me, the longer this takes, the better.
Look at dragon52's analysis on message 428. He did a much better job explaining than I did.
Best of Luck!
Very well and clearly stated. There shouldn't be any more questions after your well-supported presentation of the situation.
Cheers!
I'm new to the preferred stock arena as well, but it is my understanding the WAHUQ would be paid first if liquidation or a buyout occurs. It is the "safest" bet as it is a preferred stock to the Trust of WMI. I think people are laying of WAHUQ because the pps doesn't appear to be going anywhere too fast, thereby reducing the ability to make any "quick money" off of it. I feel WAHUQ is undervalued, as are all of these stocks, as the liquidation value is $50. I think WAMKQ is attractive because the pps is low, volume is high, and with a liquidation value of $25, I think it is well worth the investment. WAMPQ is also undervalued as it is a 7.75% dividend, preferred convertible stock with a liquidation value of $1,000 or convertible to 114 shares of common stock. I don't think that liquidation is going to happen as WMI is in Ch 11 and not CH 7, however, although it is unlikely that preferreds will see full liquidation if a buyout occurs, there is no doubt that preferreds will get treated well, especially considering the current prices. I am a rookie investor, I try to share my thoughts as I believe that open communication is the key to everything. Buyer beware as always, especially with a pinky, but how often do you get the opportunity to pick up preferreds at such a low price with a realistic chance of making HUGE returns on your investment? I don't think opportunities like this come around too often, and given that this whole Washington Mutual situation seems to be so far out of the norm, I'm all in!!!
Best of luck to you no matter which stocks you decide to buy!!
It's all you brother. I don't know wtf I'm doing wrong. Make yourself at home!
: ^ )
Hey zardiw. I am having troubles linking up the new stockcharts chart for WAMKQ. I added you as an assistant and was wondering if you could insert the below link into the ibox so it displays properly. I don't know what I'm doing wrong. If you could help out it would be very much appreciated. Thanks.
http://stockcharts.com/h-sc/ui?s=WAMKQ&p=D&b=5&g=0&id=p72304887108
FYI, you hit the nail right on the head about me though. I am wound pretty tight and people are always telling me to calm down, but I can't help it. Good call!
Cheers!
Way to hold strong. I didn't sell any either. There's no way I'm selling off after all of the trouble I went to to pick up these stocks in the first place. I'm all in and I'm loving every minute of it.
"Shake the tree and see how many monkeys fall out" I LOVE IT!
Thanks for your insight. I have a bid in at .30 just in case it dips again. So what do you think, it will go up to .50 for a while, back down to .40, and then back up with a nice little run?
We're all good Itd80 ! I'm sitting here listening to Shakedown Street and I'm having a blast.
I rebought 1,100 shares yesterday at .45 and just tried to get filled at .30 and .32 for 500 more shares and no execution. I see it's back up to .40 right now. kc_speculator would probably tell you not to listen to me, but I definitely wouldn't be shocked if WAMKQ finishes way up today. We'll see what happens, but I'm glad I holded through the manufactured sh*t storm created by the MMs. It wouldn't suprise me if they try to drive it back down to .30 1 more time this morning before liftoff.
Best of Luck!
Looks like it's going back up for a while, but I wouldn't be suprised if they drive it back down to .30 in a little while.
Congrats if you sold some to protect your investment, but tisk, tisk, tisk, if you sold because you were scared!!
: ^ )
Fair enough.
I think we're in pretty good shape though. The preferreds are taking a hit right now, but I think if bad news was leaked, then WAMUQ would be at 2 cents already.
GLTY as well and hopefully I will be able to say "I told you so."
Well, I saw low trade of WAMKQ all the way down to .25
Whoever sold to them that low should kick themselves in the appropriate genitalia!!!
: ^ )
I don't care if people know what I invest in. I'm not trying to hide anything and certainly have nothing to prove. In addition, I've read all of your posts and not only do you never offer insight or helpful advice, your posts are filled with negative emotion. If you don't like what I have to say then don't read my posts, but if you truly don't believe that Washington Mutual Inc is going to continue to operate (duh, ch 11 not chapter 7) or that they are not going to get bought out, then you definitely should take the word "speculator" off of your little nickname.
I saw low trade of $5.10 and it appears it is going back up.
: ^ )
Wrong again speculator. Geez, your name would suggest that you have foresight, but I guess titles don't mean anything.
I have 2,015 shares purchased at an average price of .3174, and I'm planning on selling 500 of them when it hits a buck.
I have 352 shares of WAMPQ purchased at an average price of 4.0379, which I've made 1169.69 on and will not be selling for a long, long time.
I have 111 shares of WAHUQ purchased at 1.91 for insurance purposes and a guaranteed payout as this is a preferred stock to the Trust and gets paid before all other preferred shares as WAHUQ is actually an unsecured bond.
I have 3,080 shares of WAMUQ that I am letting ride.
For everyone's information, the first penny I ever invested in my life was a few weeks ago when I bought 20,000 shares of WAMUQ at .062 and sold for .081, rebought and did the same a couple more times with WAMUQ and once with HMIT and ESRG. I did a couple quick flips to make some $$. I was able to turn $1,200 into current day market value of $3,917.28 in a month, and I am in these stocks for the long term and expect that 3,917.28 to be much much higher within a couple of months.
I wish I had the money to be a pumper, but I don't, so once again the speculator is dead wrong. If you don't think that WAMKQ is a good stock to buy and feel that .50/share is too much to pay for a stock with a liquidation value of $25, then you have a lot to learn and you should get off this board and go speculate somewhere else. Thanks for your opinion young man, but your speculations couldn't be further from the truth!
Best of luck to everybody except kc speculator, who apparently should worry far less about what other people are doing and more about himself!!!
Hopefully in a couple months my new name for Billiam_2 will be "Little Nostradamus". I hope your predictions are correct. I have my positions locked, and do what I can everyday to keep buying as much WAMPQ and WAMKQ as possible.
Please, please, please copy and paste the stockcharts url below into your browser.
http://stockcharts.com/symsearch/index.html?WAMKQ
Once you are there, Click where it says "If you think we are missing a symbol please let us know."
Follow the steps to request that this chart be added. It only takes a few seconds. Do it as many times as possible. I request this chart about 10 times a day, but apparently they don't like me.
If everyone could put in a request for WAMKQ to be added to stockcharts.com at least a couple of times a day it would be much appreciated and we will all benefit from it. Thanks and good luck to all!
MMs finally made some real money again, but that's about it. It was nice to see WAMUQ get some action again though. It's pretty clear that .06 appears to be the bottom. My guess it it will do its thing between .06 and .065, but once it starts moving again, those who aren't on the train missed it. Best of luck to all!
I'd say if you really want it, change your bid to .45 and it will go right through. 1,000 at 4 cents more is only a $40 difference. It's up to you. If you think you can get it cheaper than .45 tomorrow, wait it out. I'd cancel the order, put one in at .45 andit will get filled quick.
jmo
I just picked up 1,000 more shares at .45
I tried to get filled at .42 , .43 and .44 but it was taking to long, so I put in a bid at .45 (current ask) and it executed in 2 seconds.
Wooooooooohooooooooooooo!
WAMKQ will be over $1.00 per share next week or sooner
imo
I think part of the dip is also the result of people dumping their WAMKQ to pick up WAMPQ, which is ok, but I also feel that WAMKQ is far from ending it's run. I predict that next week it is up 400% from the current price of .40 (which is bs anyways). People just made the mistake of selling at .40 which is exactly what the MMs want. My guess is that they now control the .40 bottom and .50 bottom that happened yesterday. Watch them jack the price up tomorrow. Those who sold today will not be happy with themselves imo.
Very good point. They don't have as much to work with. I am very curious as to who in their right mind would be selling this stock off right now, especially when the likelihood is that it is going to go up up and away. I guess I am indifferent to the swings. I am in and holding. I'll never be able to get in cheaper than my current position at $4.03 paid per share of WAMPQ, average of .158 buyin of WAMKQ, 1.91 buying of WAHU, and of course .0614 buying price of WAMUQ. I will definitely buy more if I can come up with the cash, but either way, I'm sitting this one out and plan to reap the benefits of holding!!
Best of Luck!!!
It is just the MMs shaking people. The price and volume don't jive. There have only been a small percentage of trades under .50, however magically the price is at .41 . It's all bs as usual, and if you are selling off between .40 and .50 imo you are an idiot!!!
Sweet. There should be! 5 months ago it closed over $600 per share and it pays out super killer divis. We'll see what happens, but imo this bad boy will be going up about $2 bucks per share every day. That won't be as big of a % change as the others, however, it is a good indication as to what is going to happen (knock on wood). No matter what happens, I'm not worried. I only started with $1,200 in cash to invest about 3 weeks ago. I initially protected my investment by selling part off, but f that. My $1,200 is now at $3,616.37 and I'm hoping to watch it grow to much bigger than that. I had never invested before up until a few weeks ago, but I figured I spent more than $1,200 on cigarettes last year which is like buying a stock and lighting it on fire, so as far as I'm concerned there is no risk. I certainly feel for all who lost the farm in market value over the last several months. Hopefully they didn't sell and hopefully they bought more. They certainly have had ample opportunity to do so and hopefully they are trying to cover all of their losses by buying back in at the discounted prices we have seen of late.
Cheers, and have a great day Viva!!
I'll bet you a dollar WAMPQ breaks $10/share today.
Last trade for WAMUQ on Etrade was .065, current bid, .065 ask .0655.
Woooohooooooo. Let's watch WAMUQ go back up to .10 again!!!
I think there is a real possibility that WAMPQ will be trading over hundreds per share ballpark next year, provided a buyout doesn't come along and put the $100 to shame. 5 months ago, June 12 2008, WAMPQ closed at $670 share. It is a great stock at a great price. Great day, great stock, great news, great potential, great posters, great great great great great. Have a great night!!
:^ )