Replies to post #365250 on Mr Cooper Group Inc (COOP)

[WithCatz]

LG thanks, and for more info for those reading along..

Virtually "all" companies have a difference between what is "authorized" and what is "issued".

"Reorganized WMI will have 500,000,000 authorized shares of common stock, 200,000,000 shares of which will be issued on or about the Effective Date, and 5,000,000 authorized shares of preferred stock, "

AUTHORIZED:

On Day #1 -- 500m shares of 'common' NewCo stock will be 'authorized'
On Day #1 -- 5m shares of 'preferred' NewCo stock will be 'authorized'

HOWEVER ISSUED is different:

On Day #1 -- Only 200m shares of 'common' NewCo stock will be 'issued'.
On Day #1 -- NO 'preferred' NewCo stock is 'issued'

{That's the shares to be converted from current equity shares}

MEANING

On Day #1 -- There's another 300m shares of NewCo commons 'not issued', but 'authorized'
On Day #1 -- There's 5m shares of NewCo preferreds 'not issued', but 'authorized'


This delta between authorized and issued is, again, normal. The remainder is kept back by the company so that they can do Mergers/Acquisitions and for other stuff. The concept, among many many many companies is to have "in reserve" such extra shares so that such M&A activities can occur without the hassle and expense of having to "authorize" such shares later.

A simple example -- "NewCo" decides to 'buy' another company. They could spend 'cash' to do that {cash, of course, of limited quantity in NewCo} or they could use 'authorized' shares -- say, hypothetically pay 10m common shares for the "AcquireCo" -- now there are, 210m commons NewCo shares outstanding (aka, Issued)....


And lastly, I am sure somebody's going to get uptight about the words "par value" -- "each with a par value of $0.00001 per share."...

Par Value is an ancient carryover required for certain states, and is being slowly phased out. Don't even pay attention to the "par value" -- it's meaningless...

http://en.wikipedia.org/wiki/Par_value - "Par value stock has no relation to market value and , as a concept, is somewhat archaic. The par value of a share of stock is the value stated in the corporate charter below which shares of that class cannot be sold upon initial offering; the issuing company promised not to issue further shares below par value, so investors could be confident that no one else was receiving a more favorable issue price. Thus, par value is a nominal value of a security which is determined by an issuing company as a minimum price. This was far more important in unregulated equity markets than in the regulated markets that exist today."



...Catz

[lockednready]

Wow...this will be a serious reverse split.