Replies to post #419925 on Mr Cooper Group Inc (COOP)

[jhdf51]

There goes the reverse talk

[UpTickMeA$AP]

You speak of speculation as if it were fact.. not a healthy thought process.

$WMIH


Glta!

[Shomidamoni]

Or issue only a fraction of the authorized shares and save the rest as a controlling interest to prevent a hostile takeover.

[fsshon]

No.No.No. You are so far off base I do not know where to start.

1. The only reason a company does a r/s is to get the pps up to a more manageable level. In the context of institutional ownership, institutional investors do not like to invest in companies whose share prices are below $10 pps. Manipulation is much less (overall) in companies with pps over $10 so the stock investment is much more secure.

R/S tend to dump small investors (they sell) and only the big guys remain. An R/S could affect our NOL's. When the bankruptcy court approved the POR7 and roped off the pref owners and equity owners into a new ownership change sub group for tax purposes, the abandoned bank stock of WMB created a very large NOL that is now unrestricted but not entirely locked in. The ex pref owners and equity group is the 50% ownership nol stabilizer group. If this group (85% of WMIH issued shares) changes to less than 50% ownership it will affect the NOL's. WMIH has a poison pill provision to keep this from happening. So in essence this group is one of the 5% owners of WMIH shares that protects the NOL's.

Messing with share structure could affect NOL's (our largest asset) and potentially create an ownership change with the sell-off that would surely change if a r/s occurred. So IMHO. No R/S until the NOL's are used up and most likely we will then be absorbed into KKR fold once they are finished using us as their personal SPV. Special Purpose Vehicle for M&A.

KKR intends to own 42% of WMIH and invest over 1 Billion in our little shell to help it grow. I expect with M&A the absolute potential of a PE of 6/1 will push this stock above that level ($10) in 2 years (if not sooner). Because we don't pay taxes on revs it could potentially push us to a 9:1 or 10:1 PE ratio pushing our shares to higher values on acquired revs. As long as the debt is low and pref contracts are converted on M&A closing this comp pps will continually grow.

With the fact that KKR being in the boardroom and M&A potential of a 1 Billion annual revenue producing company like Capmark and the fact we are getting their CEO/COO revs vs taxes because of our NOL's will make us grow much faster than a company that has to account for taxes. However, the sub group has to stay intact. WMIH would halt trading if a sell-off occurred to protect the NOL. This is the main reason the BOD does not want this stock trading and states "we are not aware of any market maker making a market in our securities."
Moving to the higher exchange will produce more pps security.

Example. Company A has 1 Billion annual rev vs 500M O/S. Profit on 1 B is 40% which is 400M annually X 6 = 2.4B. / 500M = $4.80.

Company B has 1B in rev with 400M profit but has 35% fed 10% State /local taxes setaside. That's 45% (180M) setaside in taxes that can not be used for growth. Leaving 220M x 6 = 1.32 B /500 = $2.60 pps.

(I've left out debt in this example. K.I.S.S)

See the difference this makes in terms of gross profit potential of Comp A vs Comp B? Company A will only need to do 2 acquisitions of 1B rev co to get to $10 pps. Comp B because they have to account for taxes grows much more slower and needs to do 4 acquisitions and issues much more stock to raise the cash needed, which in turn dilutes shareholders. And no potential for divies to shareholders.

2nd strong point for Comp A. When they acquire a newco. The tax savings account of acquired comp can be used to help fund LBO. Therefore acquiring newco for less $$$ and therefore building shareholder value, not diluting them. Acquiring company simply puts newco in "consolidated tax group" for tax purposes. As long as acquisition is completed by End of Tax Year the profits of newco will be offset by NOL's of acquiring co.

R/S tends to kill the potential of a company to grow and keep long-term institutional investors invested. Splits tend to kill value not create it. The fact that a company has 500 M O/S which WMIH will potentially be close to means nothing in the relative terms of Wall Street when it comes to O/S vs Revenues.

The 3.5 Billion A/S is just a number. Remember the model is "issue pref contracts to raise cash, convert to equity on closure of M&A, rinse and repeat." Once these 600M pref contracts are converted. It opens a new door to "do it all over again with the next co."

Point of context. KKR has never allowed a R/S of their stock. They would rather buy back shares instead of split them.

https://www.splithistory.com/kkr/

2. IMHO: Quit drinking the Escrow share exchange kool-aid. The only evidence that is available (not speculation) that has anything to do with WMIH and WMILT with an equity issue is when the POR7 was approved. 2.9 Million shares of WMIH were setaside to address the D&O claims of certain officers and claimaints that were part of the litigation that has now been settled. LT will also reap about 55M in cash they can distribute too! :-)

When the non-settling claimaints appeal to kill the settlement is denied, WMILT will be given the right to release the shares to escrow markers. However with the way the civil court system works this could take months. Better for all involved because LT will have to sell the stock to get the funds to give to LT interests. We should be at a much higher pps by then. If this BOD does what they are required to do via Pref contract language we will be at least doubled by then. That makes the shares much more valuable.

Cheers
Blue

[MasterBlastr]

I think JPM has a dirty shell and they are going to reverse-merge with WMIH to clean things up a bit. We will lose the NOLs but we gotta take the bad with the good . . .