Keep in mind this BOD is going to do what is commonly referred to as ICI (Issue/Convert/Issue) in the corporate financing world. It's actually a very sensible approach to the way M&A has been accomplished by other companies associated with KKR.
1. Issue preferred voting shares to give the shell the funds necessary to acquire a revenue producing company for long-term growth.
2. On date of merger completion convert all outstanding preferred shares to common equity in newco. This opens the door to step 3.
3. Issue new preferred since the debt of the other preferred is converted to equity and the issued shares have been absorbed by the newco shareholders and the pps.
RINSE AND REPEAT will be the strategy of this BOD. It is how you quickly grow WMIH into a Fortune 500 company virtually overnight (Wall Street talk for 1 year).
I expect this stock to be 3-4 times what it is today vs 1 year from now. Why?
1. Debt will be covered by existing funds. 2. Earnings will be offset by "No Taxes!" 3. Growth will be accelerated by extra tax savings accounts of acquired companies who will be put into the "Consolidated Tax Group" that Holding Companies use to their advantage. 4. KKR/CITI combo on accelerated growth. 5. Pledge by KKR and their affiliates to not hedge or short WMIH positions. This should be funneled downstream to others in the little group. 6. Experience of new board members in M &A.
I am excited about "riding the coattails of all this experience that will surely make smart decisions to protect their investors."
Good Day Cheers Don
I do not expect this ICI to be slippery. I expect this BOD will have plenty of traction.
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