There are a few issues that I think are getting waysided and/or overlooked:
1. the $4.4 billion in deposits belong to WM. There was never any real question, so I don't understand how everyone felt the PPS would rise on that alone...especially considering the public documents where they assess debts to be (possibly in excess) $8 billion. And, yes, I know they do not necessairily need to pay the $8B this month. I think it is encouraging, however, that the approximated $5B was fairly realistic given the actual; makes me feel more sure that the $8B is on target also. Since JPM agreed to give access to the money to WAMU (could they have done otherwise without looking inane?), the signature on the order, while required to make it "legal," is a mere formality.
2. JPM did not necessairily want to leave the remaining assets behind because they are not worth anything but rather it was a liquidity deal. What they "bought" (cough, cough) was very clear-cut, immediate, and could easily be assigned value. They wanted a quick increase of assets without taking on significant debt and uncertain portfolios; thus, they did not purchase the holding company along with the branches.
That does not mean the remaining 32B is worthless. It just means that this is going to take time.
3. This is a long-term play. If you are looking to get rich quick, this is no longer the stock for you. The flipping for mere pennies is pretty much gone. Patience is now the name of the game. I bought 4,500 shares at $4.29. I lost roughly $20k. I'm not rich. That was my refinance money to get out of my blasted arm. I believed in WM(it is a well respected bank in Texas too) and when new managment took over, I felt the stock would go up. I gambled and lost. However, I still believe in the company. I sold a car and used the proceeds to buy my pps down to 30 cents. I'm in this because I've already lost so much and my gut tells me I should easily be able to recoup what I lost.
Will it happen overnight, no. Why not?
First, this is not your typical "Q" stock. I'm not pumping; it just isn't. We are getting blocked because of some serious players in this game that I can wager are not common. They are dictating price at the moment and for whatever their reasons, they want this price to stay in the basement. They cannot keep it here forever.
Secondly, because the holding company is left with variable assets, they need time to value the assets. There also has to be confirmation that the debt is actually around $8B. Once the assets and liabilities are assigned a value, this stock will go up. That could be a couple of weeks; it could be a couple of months, it could be a year. This is legal. There is undeterminable red tape. And add to that an investigation. *shrugs* The bottom line here is that most likely there will be money left over. I don't think $3/$4 is out of line and I said that a while back.
How can I say that?
Well, first the marking on the filing of intent to pay unsecured creditors.
Second, the attestation by counsel that they are not seeking funding to pay for the bankruptcy. That is huge! Don't believe me? The team of lawyers they have working on this case are 24-7. I wouldn't doubt a 100k is being spent almost daily. What was the cost per hour of the one reconstruction firm? $600+ an hour for the main man?
4. The market is in such turmoil that just because this has not made the "big run" does not mean this stock is dead. When is the last time the DOW was under 9k? Was it in your lifetime? These are uncertain times. People are hoarding money and pulling it out of investments and banks (ummmm the reason this is now a pink slip if you can buy the garbage from the FDIC) not putting it into a "lotto play" which is what this is up to a certain penny value until the assets and liabilities are firmly set.
As they say, patience is a virtue....
~Silk
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