So, why did the pps pop to $1.35 with the NSM merger and then start to fall? What does that say about the investing public, or who were those investors, were they retail or other?
If a machine is broken and stuck as WMIH had been, and then the repair man comes in and gets it moving again, you expect it to keep moving, but instead the machine looks weak again and slowing down. Like the repair didn't last. So why? Why this pattern every time, first with KKR then with NSM?
I thought the idea was that a merger would boost the price initially, and then the pps would slowly but solidly continue to move upward soon after as more shareholders that aren't daily watchers learned of the merger and it grew their confidence in future potential leading them to buy more and thereby also attracting attention from new investors. But- that didn't happen at all, in either case.
Instead both times the market instantly popped the pps up to the very maximum it believed the merger was worth, and then immediately after started to lose confidence in that value. By this pattern, even if we do somehow one day in many years get to the mythical mark of $20-$25 that has been optimistically posted here before, two things would happen-
1. That pps would be achieved immediately following an announcement of other merger, which would have to be astronomical in scale by the way, and-
2. The pps would drop to $12 within days or weeks of such event.
Why? Why this way every time??. Why not behave like a normal stock that slowly but steadily ascends year after year? Google for instance had 25%+ growth in the last year. If after we hit $3.50 following the KKR merger, we then experienced even just 20% growth each year since, we'd be around $7 By now. I'd be pretty pleased with that. So what makes WMIH suck so bad that mergers dont increase retail confidence????
