Mr Cooper Group Inc (COOP)

[ReikoBlack]

Really, is that how it works? Why issue 3.5 billion shares? Why not issue 1.75 billion, then the stock would be $20. How about WMIH issue 500 million shares, then the stock would be $70. Do you see the point i'm trying to make? It doesn't work the way you think it works.

WMIH is trading around $1.30, right now. In order for WMIH to aquire a $35 billion portfolio by issuing 3.5 billion shares the share price of WMIH would have to already be at $10.

Lets say the illiquid portfolio coming back from safe harbor is worth $35 billion. Lets say WMIH issues 3.5 billion shares to escrow holders in exchange for the $35 billion portfolio. I ask you. What do you think the "diluted" stocks are going to be worth.

The answer is they will be worth around $10. Since the dilutive shares are 3.5 billion and the original shares are only 200 million, the total valuation is essentially going to be worth whatever the portfolio is valued at... in this case it will be $35 billion / 3.7 billion total shares... approximately $10. This is on the conservative side of valuation.