Think of it as a Butterfly.
Stock Option Butterfly of a Call and a Put at the same strike price of $2.00
As the PPS rises the derivative liability to WMIH increases, and as the price falls the derivative asset increases.
The derivative liability deceases the book value of WMIH to lower the PPS. Keeping the PPS from running away and at $3.00-ish.
The derivative asset increases the book value of WMIH to rise the PPS. Holding the PPS at or above $1.00 to remain on the NAZ.
Now as we near the EOY for the 5 Year CL/CG with the return of assets and value like; "the Final Payment" for "WMB and it's assets", and WMIIC accumulated cash from ABS CERTs, and Other Stuff. Now the Derivative attribute and "B's" Line of credit is no longer needed, and the PPS is going to straight Book value for the "Stock for Value Event".
BIG HLCE,
Ron
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