Mr Cooper Group Inc fka COOP

[SamuraiProgrammer]

Lodas, about point #3

(3)...if there were going to be a payout of these claims, would not the short sellers start to cover...? if they are hiding cheap shares as BBAN has suggested, would not they use them to cover before a tremendous price spike is expected due to FDIC closure, and Dimon making a final payment for the assets he got in WAMU receivership?

I am not sure there will be a spike. In fact, I personally believe there will be a crash. Here's why.

Remember that the current company was spun off from the LT and therefore had no access to the BK remote assets.

I believe there are two paths for asset recovery.

1) from FDIC will go to the current company and would cause a price spike

2) from BK remote assets which should go only to escrow holders and would not immediately affect the value of the current company.

Now, I don't believe that FDIC disbursements are imminent. In fact, I question whether they will come at all. So that (in my mind) rules out #1 from being a concern.

So let's talk about #2.

There are several ways that the assets from #2 could transition.

A) Cash can be disbursed through DTC. This will not affect current company share price directly. However, it might cause a lot of holders to dump the current company stock as they were only holding it as a hedge in case things did not transact appropriately (i.e. the company got the assets instead of the escrow holders).

B) The assets could be purchased. This will only affect the current company if they purchase them. Again, this can be done in a couple of ways.

B1) Purchase with cash - In this case there should be no spike or crash. Theoretically, it will be an equitable trade of value for value.

B2) Purchase with stock. This, again, will be an equitable trade of value for value BUT many may simply run because it appears to be a dilution. THIS could cause a crash.

I think the shorts are smarter and better informed than I am. Therefore, they think a crash is coming. This makes me believe that B2 is how the bulk of the assets will transact. I still think we will get cash, but the the other assets will be purchased by the current company and Humpty Dumpty will be reassembled. He won't resemble the egg he once was but he will, like Frankenstein's Monster, walk and talk, and live.

I think the shorts are at risk but it is a reasonable risk for some of them.

Time will tell.

Happy New Year to everyone! Thanks to all for their contributions which have been informative or entertaining. Worthwhile either way!