Something is better than nothing though.
Actually the 1 / 7 suggestion was based on the predication of giving the shareholders back the value of their stock prior the the seizure (and subsequent sale of of Wamu Bank) at a price which many people here believe was not the true worth of the assets sold.
So here it is. JPM's current stock price is $35. The price of Wamu pre receivership was right around $5. $35/$5 = 7. Thus the assumption is that that shareholders want the value of their stock back to what it was ( actual stock price ) before its governement brokered sale. If you give each common share holder 1 share of JPM stock for every 7 of WAMU common that they have then they will in effect get the value for their shares that they would have had given a basic complete buyout at the current market price as of the seizure date.
One thing to note however is that the $5 figure is only what the market had determined the shares were worth at the date of seizure. The actual value of the stock could have been either much higher than that, and potentially lower based on debt at the time.
One other note. Let's just play along for a second and assume that Q holders did get a 1 for 7 swap, there is a potential for JPM stock to rise in the interim between the time the swap was done and the time the new shares were restricted (thus giving your former Q shares even more value than $5). Or JPM stock could lose money in the same time period and thus making the former Q shares worth less.
All of this right now is just conjecture of course. We don't know what will happen in the future. There has been talk of a settlement of basically pure cash, a swap (aka complete buyout), and of course a potential for absolutely nothing to happen in which case WAMU will continue to potentially workout a C11 plan.
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