(SPAC/SPAV VS LBO) Pyramid. I would not be to worried about that part, it is a standard disclosure. When you read this thing, it basically says.. Here is our value... Here is where we "think" we are going... These are the restrictions... This is what we want to do in the future (SPAC/SPAV) and this is what you are investing in...
This is what is called 'Cover Your Arse' Disclosure. They have laid it on the line for the investors who are driving this thing to 1 Billion in MV, they are telling you what and who WMIH is.. You are basically investing in the future of WMIH. Because, right now they really are just a shell with 700M MV and assets on the books. Speculation in a successful and thriving WMIH is driving this stock, because they just 'Covered their Arses.'
I addressed the 382 in Nol's in the sticky. They basically are reaffirming they have a very large NOL that can not be used in whole, because of the restrictions on acquisition value. You can not acquire a company (to use the NOL's) that is higher value than yours.
1B in MV for WMIh = 1B in MV for NEWCO. = 2B in MV for NEWWMIH
NEWWMIH can now use NOL's to offset taxes owed by NEWCO and use Assets and Tax set asides of NEWCO to acquire NEXTCO.
WMIH NOL's are decreased.
2B in MV WMIH = 2B in Value for NEXTCO. Use Assets and Money/Capital from NEWCO to help acquire NEXTCO. etc..If you need to use Assets and Money in NEXTCO to make Acquisition of NEXTCO you have now done what is commonly referred to as a LBO (Leveraged Buyout) We want to avoid this scenario, because this tends to highly leverage the company. SEE LBO post.
(SPAC/SPAV) Special Acquisition Vehicle is basically a Shell company that uses OPM (Other People's Money) to Acquire and grow through acquisitions. Leaving the Acquired companies board and management teams in place "just as they were pre-acquisition" to maintain value and continuity. Shell grows in M&A Powerhouse and is eventually absorbed into a Larger 500 Company or A 500 Company that can stand on its own.
I actually feel this what WMIH is going to do.. Get this Shell Stock (WMMRC does not count) to 1B in MV. Grab a NYSE company for 1B in OPM and WMIH stock. Lock the two together for 1Q and go grab another Company for 2B or =MV> 4B in MV. 1 year!!! WMIH does not need to make application to uplist, because the company they are going to acquire will already be there and by law they can apply to have their symbol converted to WMIH once they absorb the companies stock. If the company is private, they they will need to application to uplist. To have any chance to grow with OPM, they have got to get off this exchange. The real money is above us.
The Insider Hedge Funds are quite aware of what the future looks like for WMIH, this is why Greywolf bought 14.8M in shares in Feb and smaller hedgies are jumping in...
These are my thoughts.
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