The run-up through 9/21 was NOT in anticipation of getting the $4B. I never believed that was the reason—even while it was happening.
It wasn’t short covering. The short report for Sept 15-30 showed shorts covered about 6M shares: Decreasing from ~52M to ~46M shares short. Even if all of the covering was on 9/21 (doubtful) it still leaves over 90M shares traded that day.
Nope, I believe it was running because big news was leaking. 98M shares traded on 9/21 when it hit 45 cents. Then the next day another 98M shares traded and the price was essentially back to where it started.
So what happened? I think it was a “go / no-go” situation. The news we were waiting for (settlement/buyout) leaked and up through 9/21 it was a “go”. Then on 9/22, news leaked that it was a “no-go”. Some kind of snag or problem was encountered, IMO.
Think about it, 98M shares means new people were buying. These people know absolutely nothing about WaMu and its chances for recovery. Because of a leak, they get information that they should buy WaMu stock. Then the next day, they get information that it’s off. What would you do if you knew nothing about the company? It’s only natural that almost all of those people are going to sell. They are not going to hold onto the stock of a bankrupt company they know nothing about.
I believe if there was no snag in the process, the pps would have continued to rise until the day a settlement/buyout was announced.
All that being said, I really expected a repeat performance leading up to this new date (10/22) for summary judgment on the 4B. Without the snag, of course. I had thought the court date for this was just a cover for announcing the big news. It seems very unlikely to be the case for 10/22.
So I’m pretty much bummed out about it. But I’m generally a positive person and I’ve come up with another possibility. Maybe JPM needs to lose the summary judgment before the news can be announced. I firmly believe they will not actually transfer the money; but maybe they need to lose in order to have an explanation (for shareholders and the media) for why they are spending billions on a company everyone thought they already bought.
I haven’t posted here in years, but I’ve been reading everything I could find here and elsewhere about WaMu since Oct 2008. I just had to get this off my chest. Disclaimer: I have no background in any of this; I’m not a lawyer; and I have no inside information. Don’t buy or sell based on my hopes and wishes.
Okay, back to lurking for me.
AI
