Washington Mutual Preferred fka WAMPQ

[jerry22]

interesting comparison of WAMUQ, WAMKQ, AND WAMPQ:

There are two likely ways this will play out: either WAMU exits BK and starts trading again as a holding company, or it liquidates and pays off all its creditors.
If WAMU exits BK and starts trading again, the same forces that value the common at potentially higher levels will also value the preferreds at higher levels.
IF, say, there are enough assets left over, after paying higher ranking creditors, to drive the common WAMUQ from 8 cents back to, its pre-gap close at $1.50, the K pfd, now 9 cents, would likely go back to its pre-gap close of $1.50 also. So, about the same % move, an increase of 10-12X current price.

But the R pfd, WAMPQ, now ~ $1.50, would probably go back to its pre-gap close at $77. An increase of 50X the current price!

In other words, the pfd R, WAMPQ, will move up 5X as much as the other 2 choices! It's amazing that there is so little interest in this, here or anywhere else. Also surprising that the WAMUQ board would say to 'get lost', when this issue was raised. It's an even better way to play the same potential assets, and certainly should be discussed on their board. But they seem to think otherwise, so that's the way it is. Their loss.

WAMPQ, which is a play on the exact same underlying assets as WAMUQ, is both SAFER and potentially 5X more rewarding, in the exact same circumstances.

I can't forsee ANY circumstances in which the common shares would rise sharply in value but not the pfd K and pfd R!
If anyone disagrees with that statement I'd be interested in hearing the details.

Further, in a liquidation, it is possible that there would be enough money to pay off WAMPQ at FULL face value (I think it's $1000/share face value), an increase of over 600X the current price, while the common could end up with NOTHING or very little!

The main benefit of the common is that it can be easily traded throughout the day. I own both the common (for that reason), and WAMPQ, but the pfd R is by far the better choice for anyone willing to hold for the 3-12 months that this may take to play out.

While the WAMKQ pfd K is also better than WAMUQ, in terms of a possible payout benefitting the preferreds and not the common, as far as possible % gains go WAMPQ beats them both, by a huge factor.

Now, if the guesses on WAMUQ's leftover assets are completely wrong, and there is NO money left over, and not even enough money to pay off the pfd's with anything, then all 3 choices will go down to zero.
So in the absolute worst case, buying WAMPQ would be the same complete loss that buying WAMUQ would be.

But once you've decided that you want to invest in this risky BK situation, WAMPQ is clearly the best choice - NO additional risk (unless you're a daytrader), and potentially TREMENDOUS additional benefits.
On the VERY short term (1-5 days) the preferreds may not move like the common, but in the longer term, if the common does well, the pfd R will do VERY well.