DG, I have been reading your posts for quite a while now. I agree with most of what you post regarding valuation, but one thing strikes me as curious. When you talk about an initial low ball offer and then a few days later the final offer, I come up with a different scenario. In order for a global settlement to take place the FDIC would necessarily have to be included in a settlement as well. I understand that multiple offer settlements have been the case with other bankruptcies, however, it seems to me that JPM and FDIC both know what Wamu is demanding as settlement. Since JPM and FDIC are trying desperately to keep a lid on this, do you feel they would benefit by making unnecessary headlines via publicly announcing more than 1 offer?
IMO, it seems logical that the following will occur, if this is to be settled globally;
deposit funds- returned to WMI (rightfully owned)
nol carrybacks- returned to WMI (rightfully owned)
fair book value of transferred assets- paid by JPM to WMI
damages (@ undetermined amount) resulting from fraudulent transfer- paid by FDIC to WMI
Obviously share price will be reflected accordingly, and I think your numbers are really close to what we should reasonably expect.
With that said, I'm just not fully convinced of your statements that there will be multiple offers.... Each entity involved in the negotiations knows what it will take to settle this. I can't find a purpose for anything other than the final, accepted offer, to be announced as quietly as possible. Is there something I'm missing here?
TYIA
Byrd
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