Replies to post #433747 on Mr Cooper Group Inc (COOP)

[invest1980]

Thanks to Hanky Panky, TPG knew their initial investment was dead money in the summer of 2008, so they shorted the hell out of WAMU knowing that they would convert their Preferred shares to common to cover their short position (if necessary). If you know for sure a stock is going to 0, you don't even need to worry about covering your short position, but it's nice to have a safety net.

In addition, once TPG converted preferred to common, that significantly increased the number of shares that could be loaned and shorted (legally).