Washington Mutual Preferred fka WAMPQ

[Vulcanized Crawler]

bopfan post....fdic pays.
What I meant is that when it is announced that the FDIC will pay WMI for the seized assets the value of the commons will skyrocket. Imagine WMI with $100 billion+ forthcoming: once you compute what would cover the preferreds (about $4 billion) you're talking about nearly all the remainder going to 1.7 billion in common. Of course, TPG would be the biggest winner, but the rest of us wouldn't complain @ $59 per share times our respective holdings ($1 billion/1.7 billion= $59).

Some people would sell immediately and others would wait until a third party came in to bid for the newly-rich company. WMI would really have no claims against JPM at that point (it couldn't recover any $ from JPM because its losses would have been covered by the FDIC $) and upon selection of a bid from numerous competitors (the $100 billion would be exchanged for stock -- with a premium, of course), and the company would emerge from Chapter 11.

This is the simplest and best way for equity to be recompensed, but it requires the FDIC to accept responsibility for all WMI's losses (which it should since without the seizure WMI would have received TARP and would have been just fine).