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Zitat investorwad:
We all pretty much know where WMIH stands at this point, but what is unknown is what we are going to buy. We know we raised just under $600M with the equity offering and that cost us about 2/3 of the company as we know it now. There will be some additional cash on the books with the KKR Warrant exercise and existing cash so I'll roughly estimate total to be around $750M. If someone knows the exact number, fine, but it's not critical for this.
So, did we really sell that much of the company for what appears to be a relatively small amount? Is that roughly $750M really all we have to buy a profitable business and finally start to monetize our massive NOL? Several here have had different theories that claim this simply cannot be the case, and I am really leaning in that direction because as several have pointed out, with "only" $750M, we'd be lucky to generate about $200M/year in EBIT and it's highly likely closer to half of that in reality. With so many shares outstanding, we may be sitting in the 2s for quite some time.
In other words, we appear to have given KKR a sweetheart deal, so what are they going to do to earn it and make money for themselves if indeed just buying a business for cash really won't get us very far?
The varying "kicker" theories I've noticed are (in no special order):
-The R theory suggests KKR is with us because they know R assets are coming and WMIH will play some profitable role in their management and/or liquidation.
-The debt/leverage BEFORE first acquisition theory suggests some entity, possibly KKR, will subscribe to substantial debt and WMIH will use it to buy something much more substantial than our existing cash possible could.
-The debt/leverage AFTER first acquisition theory suggests WMIH will leverage the first acquisition to invest in the business and/or make additional acquisitions. AKA, the baby-step theory.
-The dividend theory suggests that opposed to PPS appreciation as primary target, WMIH/KKR intend to declare regular dividends to disburse as much as possible to shareholders.
-The preferred theory suggests that as opposed to debt, WMIH's next substantial capital raise will be preferred.
-The up-listing theory (alone or in conjunction with other events) suggest that even without a significant "kicker", with just an acquisition and profit, up-listing will allow other potent entities to buy in on the open market and raise the PPS while awaiting further positive events.
-Any others?
So, yeah, being somewhat disappointed in what we seem to have "given away" and the cost to existing shareholders (and still confused as to why none of our BK partners helped capitalize WMIH), I too believe there may very well be some thus far undisclosed kicker that will make this all feel better and get the PPS moving in the right direction.
Anymore color/DD to add to any of these that make one more likely/plausible than others?
Edit: Forgot one:
-The nothing more is really going to happen theory suggests there is no "kicker" per se and with what WMIH has disclosed, this is all we get and the company through organic growth and solid management will increase value.
--------------------
Zitat jaysenese:
Some general observations / hypotheses:
1. Stock price has been flat at 2.15 x 2.20 for many weeks. I've never seen this with another company.
2. From this I infer that:
a. Stock is being held in this range by third party(s): it is not natural buying + selling or there would be more volatility.
b. From the disclosures in the January 5, 2015 paperwork we know that the conversion price is based on a rolling 20-day "average" price of the stock: since stock is now being neither driven higher or driven lower, but held in check, it seems like these third parties want the "average" price to be somewhere between $2.15 and $2.20 / share, or the stock would be moving in one direction or the other.
c. This makes me think that the next step in our deal is already locked down, and, whatever form it takes, a stock price between $2.15 and $2.20 is involved somehow.
3. If a deal has already been done, that would explain the recent lack of institutional activity. Volume has dropped sharply, although we had large institutional buyers (at least two different ones) in 4Q 2014. This leads me to believe that there are multiple parties to the next step in our deal, and these parties have all been given insider information that restricts their buying and selling in our stock. It makes no sense to me that volume would simply dry up in a deal so closely watched by so many big players.
4. If the deal has already been locked down, and if major institutional players are restricted from trading the stock due to their possession of inside information, then it seems like the next step will be a BIG step, not a little one. I believe that a 'little' step would have been announced and perhaps completed by now. The longer this drags out, the more convinced I am that the next step is a BIG one.
5. Still, it must be difficult to keep the stock price flat, and keep all particies compliant with NDA restrictions and trading restrictions, so I believe that there must be some "thing" that our dealmakers are waiting for. I have the sense that this "thing" must be something out of our control: if it was something within our control or sphere of knowledge (like, say, waiting for a specific date to arrive, such as March 20 2015 as some have speculated, then I don't think that the deal makers would have locked down the financing so far in advance.)
6. What might this "thing" be that the deal makers are waiting on? A couple of possibilities include:
a. A court's decision somewhere;
b. An FDIC-R decision;
c. An IRS decision.
To summarize: my (8-BALL) guess is that the next step will be:
1. A BIG deal that
2. Involves multiple insider parties and
3. Involves a court decision AND/OR an FDIC-R decision and/or an IRS decision and
4. Involves a very large amount of immediate debt, a massive leveraged buy-out, which is what KKR and Blackstone know so very well.
Bottom line: it's all good.
--------------------------------------------------
ZItatende
MfG.L:)
Zitat investorwad:
We all pretty much know where WMIH stands at this point, but what is unknown is what we are going to buy. We know we raised just under $600M with the equity offering and that cost us about 2/3 of the company as we know it now. There will be some additional cash on the books with the KKR Warrant exercise and existing cash so I'll roughly estimate total to be around $750M. If someone knows the exact number, fine, but it's not critical for this.
So, did we really sell that much of the company for what appears to be a relatively small amount? Is that roughly $750M really all we have to buy a profitable business and finally start to monetize our massive NOL? Several here have had different theories that claim this simply cannot be the case, and I am really leaning in that direction because as several have pointed out, with "only" $750M, we'd be lucky to generate about $200M/year in EBIT and it's highly likely closer to half of that in reality. With so many shares outstanding, we may be sitting in the 2s for quite some time.
In other words, we appear to have given KKR a sweetheart deal, so what are they going to do to earn it and make money for themselves if indeed just buying a business for cash really won't get us very far?
The varying "kicker" theories I've noticed are (in no special order):
-The R theory suggests KKR is with us because they know R assets are coming and WMIH will play some profitable role in their management and/or liquidation.
-The debt/leverage BEFORE first acquisition theory suggests some entity, possibly KKR, will subscribe to substantial debt and WMIH will use it to buy something much more substantial than our existing cash possible could.
-The debt/leverage AFTER first acquisition theory suggests WMIH will leverage the first acquisition to invest in the business and/or make additional acquisitions. AKA, the baby-step theory.
-The dividend theory suggests that opposed to PPS appreciation as primary target, WMIH/KKR intend to declare regular dividends to disburse as much as possible to shareholders.
-The preferred theory suggests that as opposed to debt, WMIH's next substantial capital raise will be preferred.
-The up-listing theory (alone or in conjunction with other events) suggest that even without a significant "kicker", with just an acquisition and profit, up-listing will allow other potent entities to buy in on the open market and raise the PPS while awaiting further positive events.
-Any others?
So, yeah, being somewhat disappointed in what we seem to have "given away" and the cost to existing shareholders (and still confused as to why none of our BK partners helped capitalize WMIH), I too believe there may very well be some thus far undisclosed kicker that will make this all feel better and get the PPS moving in the right direction.
Anymore color/DD to add to any of these that make one more likely/plausible than others?
Edit: Forgot one:
-The nothing more is really going to happen theory suggests there is no "kicker" per se and with what WMIH has disclosed, this is all we get and the company through organic growth and solid management will increase value.
--------------------
Zitat jaysenese:
Some general observations / hypotheses:
1. Stock price has been flat at 2.15 x 2.20 for many weeks. I've never seen this with another company.
2. From this I infer that:
a. Stock is being held in this range by third party(s): it is not natural buying + selling or there would be more volatility.
b. From the disclosures in the January 5, 2015 paperwork we know that the conversion price is based on a rolling 20-day "average" price of the stock: since stock is now being neither driven higher or driven lower, but held in check, it seems like these third parties want the "average" price to be somewhere between $2.15 and $2.20 / share, or the stock would be moving in one direction or the other.
c. This makes me think that the next step in our deal is already locked down, and, whatever form it takes, a stock price between $2.15 and $2.20 is involved somehow.
3. If a deal has already been done, that would explain the recent lack of institutional activity. Volume has dropped sharply, although we had large institutional buyers (at least two different ones) in 4Q 2014. This leads me to believe that there are multiple parties to the next step in our deal, and these parties have all been given insider information that restricts their buying and selling in our stock. It makes no sense to me that volume would simply dry up in a deal so closely watched by so many big players.
4. If the deal has already been locked down, and if major institutional players are restricted from trading the stock due to their possession of inside information, then it seems like the next step will be a BIG step, not a little one. I believe that a 'little' step would have been announced and perhaps completed by now. The longer this drags out, the more convinced I am that the next step is a BIG one.
5. Still, it must be difficult to keep the stock price flat, and keep all particies compliant with NDA restrictions and trading restrictions, so I believe that there must be some "thing" that our dealmakers are waiting for. I have the sense that this "thing" must be something out of our control: if it was something within our control or sphere of knowledge (like, say, waiting for a specific date to arrive, such as March 20 2015 as some have speculated, then I don't think that the deal makers would have locked down the financing so far in advance.)
6. What might this "thing" be that the deal makers are waiting on? A couple of possibilities include:
a. A court's decision somewhere;
b. An FDIC-R decision;
c. An IRS decision.
To summarize: my (8-BALL) guess is that the next step will be:
1. A BIG deal that
2. Involves multiple insider parties and
3. Involves a court decision AND/OR an FDIC-R decision and/or an IRS decision and
4. Involves a very large amount of immediate debt, a massive leveraged buy-out, which is what KKR and Blackstone know so very well.
Bottom line: it's all good.
--------------------------------------------------
ZItatende
MfG.L:)
Alles nur meine pers. Meinung, kein Kauf- oder Verkaufs-Empfehlung!
