[NEWS] WaMu Soars as Company Gets Ready to Emerge from Bankruptcy.
By Avi Salzman
Remember WaMu? The company has been trading over-the-counter generally for a few pennies a share as it winds its way through bankruptcy court.
But shares of Washington Mutual, Inc. (WAMUQ), the holding company that owned Washington Mutual Bank, have been on quite a run since the middle of the day Friday, when the company filed notice that it would need more time to come to an agreement over WaMu’s plan to emerge from bankrupcy. Shares, which have mostly been trading under 5 cents for the past two months, jumped as high as about 10 cents late Friday, and are up 34% to 11 cents per share today on huge volume — 64 million shares versus an average of about 3.6 million
Bloomberg reported late Friday that the company had actually come to an agreement that will give shareholders a stake in the company as it emerges from bankruptcy. Shareholders had felt shortchanged by the plan and alleged that WaMu debt-holders had traded using confidential information. As part of the deal, shareholders would drop that charge, Bloomberg said.
It’s still unclear what the value of the shareholders’ stake will be, as it may be dependent on certain future tax benefits. The deal would also set aside $25 million for a litigation trust that could bring suits on behalf of shareholders, Bloomberg reported.
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