Mr Cooper Group Inc (COOP)

[survivor Spain]

Climber (& Biz).. there is a 3rd option:

... 3) They present a reorg plan that dilute the commons by converting part of the bonds and/or prefs debt into common equity.

With the suit pendding I don't see that commons can get cancelled. This would mean that the plan drives towards assets liquidation and partial payment of the debt (prefs and bonds). This does not makes sense to me before the outcome of the suit since the level of uncertainty of "WMI assets" makes it impossible for now to settle any liquidation. Who would then own the "rights to benefit from potential outcome of the suite". How can anyone value these rights at this point.

The question if this option 3 is the one they chose is:

What would be the short term impact of this posible dilution in the pps?
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BAD IMPACT: mathematical dilution

On one side, by pure maths the impact of any dilution in pps is squarely negative. To some extent I think this is already factored in the current 5 cents price, so it may not be dramatic.
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GOOD IMPACT: viablility confirmed, high risk reduced, getting out of pink soon...

On the other side if there is a viable reorg plan which involves debt owners accepting equity instead of their current rights it would mean that there is not perceived risk of this equity been worthless overtime( long term liquidation and equity cancellation). It would also mean that WMI would emerge from BK with more asssets than debt ( now converted into equity) and can walk again fighting for its rights.
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MODERATE EXPECTATIONS FOR THIS WEEK.

Having said this about this "option 3" my expectation for this week is that they will ask for some more time given the current complexity generated by JPM motion.

I would advise to keep expectations moderate for this week, I hope I am wrong and either a settlement or a reorg plan comes .. but it's not what I expect.