I do not have a definitive answer. I believe the trading of Coop has been pegged to the 10 year treasury rate in recent weeks. NLU a poster on boardpost who is in the mortgage business asserts that the decline of the 10 year has no relevance to the value of Coop in that mortgage rates have not fallen significantly. I agree. Any mbs coop owns should be gaining value as a result of dropping interest rates. Any drop in the value of coop's 3 billion in servicing rights imo cannot justify the share price drop because Coop is not selling those rights and is still earning lots of revenue off those rights. Its like leasing your house out for five years at a great rate which justifies a higher appraisal based on the income approach to value rather than what the current market comparables would support. So, I lean towards the insider trading angle. $1.35 conversion price plus 60 cents today price gives average price of $1.00 if they can get the shares. Seems to me any of the institutions could have easily stopped the slide in Coop price if they wanted to. Makes me wonder if the insiders were the ones who are/were short Coop and are trying to cover, but how does one cover when institutions and insiders own 90% leaving only 10% (9 million shares?) to cover 5 million plus short. And there may be a naked short position out there that needs to cover as well. I read somewhere that since the wmih stock was issued out of bankruptcy, that the market makers never had their own inventory to begin with , so had to short. Every morning it seems they sell shares they do not have in inventory at higher prices, then take the price down until they recover the volume sold before the take down. Perhaps Friday, they sold what they did not own and hence the take down today. I realize this is the practice of market makers, but not to the extent that it has been happening imo. Perhaps the market makers are trying to save their own asses. But why would the institutions let their investment lose half their investment for others? I can see how the DTA present value can go down if revenues are not generated, but Coop is generating substantial revenue which imo is taxable despite the mark to market loss. It is my understanding that mark to market is an accounting entry and not necessarily a taxable event because no sale is consummated. So the powers that be seem to have convinced the market that things operate exactly opposite of the way things work. Hope this helps.
