http://www.cnbc.com/id/35797356
Why WaMu Stock Has Soared: It's a 'Cheap Lottery Ticket'
By: Jeff Cox
CNBC.com
Washington Mutual, known mostly as the biggest bank failure in US history, also has been a darling of stock market gamblers.
<table style="padding: 5px 0pt 0pt 15px;" width="1%" align="right" border="0" cellpadding="0" cellspacing="0"><tbody><tr><td>
</td></tr></tbody></table>
Though taking a beating in Wednesday trading, WaMu<script type="text/javascript">cnbc_comboQuoteMove('popup_WAMUQ_ID0EVEAC15839609');</script>[WAMUQ 0.446
-0.039 (-8.04%)
]<script type="text/javascript"> cnbc_quoteComponent_init_getData("WAMUQ","WSODQ_COMPONENT_WAMUQ_ID0EVEAC15839609","WSODQ","true","ID0EVEAC15839609","off","false","inLineQuote"); </script> shares have soared over the past month and year despite existing as a zombie corporation—no assets or business to speak of—since being swallowed by JPMorgan Chase <script type="text/javascript">cnbc_comboQuoteMove('popup_jpm_ID0E3JAC15839609');</script>[JPM 42.95
0.53 (+1.25%)
]<script type="text/javascript"> cnbc_quoteComponent_init_getData("jpm","WSODQ_COMPONENT_JPM_ID0E3JAC15839609","WSODQ","true","ID0E3JAC15839609","off","false","inLineQuote"); </script> in 2008.
WaMu shares have risen 181 percent in the past month and 1,760 percent in the past year—good news if you've been speculating on the stock during that time but bad if you bought in when it was trading at $2.26 when it first entered bankruptcy and even worse if you came in at historical highs of $46 a share in 2003.
It's been some feat, though, for a former banking titan and now bankrupt company that came to represent the worst of bank risk-taking during the collapse of the nation's financial system.
Traders optimistic over a series of court battles to recover value for common shareholders have been at the center of the stock's improbable rise.
"It's a cheap lottery ticket if there somehow miraculously is a payoff to the common shareholders," said Kevin Starke, an analyst at CRT Capital Group in Stamford, Conn. who has been following the WaMU situation closely. "That is one element you see in bankruptcy situations generally."
Starke thinks investors who believe that common shareholders will recoup value are probably kidding themselves. Holders of corporate bonds and preferred shares will be first in line should JPMorgan return money to investors, with common shareholders a distant third.
Still, trading in the zombie or near-zombie stocks has been a popular sport on Wall Street since the financial industry tanked. Shares of the holding company representing deceased Wall Street titan Lehman Brothers <script type="text/javascript">cnbc_comboQuoteMove('popup_LEHMQ_ID0EFGAE15839609');</script>[LEHMQ 0.1435
-0.0145 (-9.18%)
]<script type="text/javascript"> cnbc_quoteComponent_init_getData("LEHMQ","WSODQ_COMPONENT_LEHMQ_ID0EFGAE15839609","WSODQ","true","ID0EFGAE15839609","off","false","inLineQuote"); </script>, for instance, have soared 135 percent in the past month and 432 percent in the past year.
"At this point it really looks like everyone is leaping onto any type of risk they can," said Yousef Abbasi, financial desk analyst at Execution Noble in New York. "People are using it as a trading vehicle."
Indeed, traders have coalesced around WaMu, which now trades over the counter on the pink sheets but is moving this week at volumes more closely affiliated with market giants like Bank of America <script type="text/javascript">cnbc_comboQuoteMove('popup_BAC_ID0EPLAE15839609');</script>[BAC 17.18
0.38 (+2.26%)
]<script type="text/javascript"> cnbc_quoteComponent_init_getData("BAC","WSODQ_COMPONENT_BAC_ID0EPLAE15839609","WSODQ","true","ID0EPLAE15839609","off","false","inLineQuote"); </script>.
WaMu volume hit a post-bankruptcy high Tuesday of 141 million shares.
Other financials that got hit during the crisis have gained this week, among them Citigroup <script type="text/javascript">cnbc_comboQuoteMove('popup_C_ID0EZQAE15839609');</script>[C 3.95
0.13 (+3.4%)
]<script type="text/javascript"> cnbc_quoteComponent_init_getData("C","WSODQ_COMPONENT_C_ID0EZQAE15839609","WSODQ","true","ID0EZQAE15839609","off","false","inLineQuote"); </script> and American International Group <script type="text/javascript">cnbc_comboQuoteMove('popup_AIG_ID0EAWAE15839609');</script>[AIG 35.25
2.48 (+7.57%)
]<script type="text/javascript"> cnbc_quoteComponent_init_getData("AIG","WSODQ_COMPONENT_AIG_ID0EAWAE15839609","WSODQ","true","ID0EAWAE15839609","off","false","inLineQuote"); </script>, as the sector has seen wildly volatile trading lately. Speculation that the government was going to prevent short-selling in companies in which it has an ownership stake sparked a wave of short-covering from investors speculating the stocks would go down.
The legal battles between WaMu and JPMorgan revolve around two issues: A dispute over a $3.7 billion bank deposit and a related contention from some investors that the company has as much as $12 billion above and beyond what it owes creditors.
Some believe that WaMu was the victim of a bank run and dispute the validity of the FDIC shuttering the institution and brokering the deal with JPMorgan.
CRT's Starke said the hopes are being perpetrated on Internet message boards from those trying to manipulate stock prices by pumping up hopes for a JPMorgan payout to common shareholders.
"That is likely to be proven untrue and fraudulent," he said of the rumors.
© 2010 CNBC.com
Why WaMu Stock Has Soared: It's a 'Cheap Lottery Ticket'
By: Jeff Cox
CNBC.com
Washington Mutual, known mostly as the biggest bank failure in US history, also has been a darling of stock market gamblers.
<table style="padding: 5px 0pt 0pt 15px;" width="1%" align="right" border="0" cellpadding="0" cellspacing="0"><tbody><tr><td>
</td></tr></tbody></table>
Though taking a beating in Wednesday trading, WaMu<script type="text/javascript">cnbc_comboQuoteMove('popup_WAMUQ_ID0EVEAC15839609');</script>[WAMUQ 0.446
-0.039 (-8.04%)
]<script type="text/javascript"> cnbc_quoteComponent_init_getData("WAMUQ","WSODQ_COMPONENT_WAMUQ_ID0EVEAC15839609","WSODQ","true","ID0EVEAC15839609","off","false","inLineQuote"); </script> shares have soared over the past month and year despite existing as a zombie corporation—no assets or business to speak of—since being swallowed by JPMorgan Chase <script type="text/javascript">cnbc_comboQuoteMove('popup_jpm_ID0E3JAC15839609');</script>[JPM 42.95
0.53 (+1.25%)
]<script type="text/javascript"> cnbc_quoteComponent_init_getData("jpm","WSODQ_COMPONENT_JPM_ID0E3JAC15839609","WSODQ","true","ID0E3JAC15839609","off","false","inLineQuote"); </script> in 2008.WaMu shares have risen 181 percent in the past month and 1,760 percent in the past year—good news if you've been speculating on the stock during that time but bad if you bought in when it was trading at $2.26 when it first entered bankruptcy and even worse if you came in at historical highs of $46 a share in 2003.
It's been some feat, though, for a former banking titan and now bankrupt company that came to represent the worst of bank risk-taking during the collapse of the nation's financial system.
Traders optimistic over a series of court battles to recover value for common shareholders have been at the center of the stock's improbable rise.
"It's a cheap lottery ticket if there somehow miraculously is a payoff to the common shareholders," said Kevin Starke, an analyst at CRT Capital Group in Stamford, Conn. who has been following the WaMU situation closely. "That is one element you see in bankruptcy situations generally."
Starke thinks investors who believe that common shareholders will recoup value are probably kidding themselves. Holders of corporate bonds and preferred shares will be first in line should JPMorgan return money to investors, with common shareholders a distant third.
Still, trading in the zombie or near-zombie stocks has been a popular sport on Wall Street since the financial industry tanked. Shares of the holding company representing deceased Wall Street titan Lehman Brothers <script type="text/javascript">cnbc_comboQuoteMove('popup_LEHMQ_ID0EFGAE15839609');</script>[LEHMQ 0.1435
-0.0145 (-9.18%)
]<script type="text/javascript"> cnbc_quoteComponent_init_getData("LEHMQ","WSODQ_COMPONENT_LEHMQ_ID0EFGAE15839609","WSODQ","true","ID0EFGAE15839609","off","false","inLineQuote"); </script>, for instance, have soared 135 percent in the past month and 432 percent in the past year."At this point it really looks like everyone is leaping onto any type of risk they can," said Yousef Abbasi, financial desk analyst at Execution Noble in New York. "People are using it as a trading vehicle."
Indeed, traders have coalesced around WaMu, which now trades over the counter on the pink sheets but is moving this week at volumes more closely affiliated with market giants like Bank of America <script type="text/javascript">cnbc_comboQuoteMove('popup_BAC_ID0EPLAE15839609');</script>[BAC 17.18
0.38 (+2.26%)
]<script type="text/javascript"> cnbc_quoteComponent_init_getData("BAC","WSODQ_COMPONENT_BAC_ID0EPLAE15839609","WSODQ","true","ID0EPLAE15839609","off","false","inLineQuote"); </script>.WaMu volume hit a post-bankruptcy high Tuesday of 141 million shares.
Other financials that got hit during the crisis have gained this week, among them Citigroup <script type="text/javascript">cnbc_comboQuoteMove('popup_C_ID0EZQAE15839609');</script>[C 3.95
0.13 (+3.4%)
]<script type="text/javascript"> cnbc_quoteComponent_init_getData("C","WSODQ_COMPONENT_C_ID0EZQAE15839609","WSODQ","true","ID0EZQAE15839609","off","false","inLineQuote"); </script> and American International Group <script type="text/javascript">cnbc_comboQuoteMove('popup_AIG_ID0EAWAE15839609');</script>[AIG 35.25
2.48 (+7.57%)
]<script type="text/javascript"> cnbc_quoteComponent_init_getData("AIG","WSODQ_COMPONENT_AIG_ID0EAWAE15839609","WSODQ","true","ID0EAWAE15839609","off","false","inLineQuote"); </script>, as the sector has seen wildly volatile trading lately. Speculation that the government was going to prevent short-selling in companies in which it has an ownership stake sparked a wave of short-covering from investors speculating the stocks would go down.The legal battles between WaMu and JPMorgan revolve around two issues: A dispute over a $3.7 billion bank deposit and a related contention from some investors that the company has as much as $12 billion above and beyond what it owes creditors.
Some believe that WaMu was the victim of a bank run and dispute the validity of the FDIC shuttering the institution and brokering the deal with JPMorgan.
CRT's Starke said the hopes are being perpetrated on Internet message boards from those trying to manipulate stock prices by pumping up hopes for a JPMorgan payout to common shareholders.
"That is likely to be proven untrue and fraudulent," he said of the rumors.
© 2010 CNBC.com
http://www.cnbc.com/id/35797356
Why WaMu Stock Has Soared: It's a 'Cheap Lottery Ticket'
By: Jeff Cox
CNBC.com
Washington Mutual, known mostly as the biggest bank failure in US history, also has been a darling of stock market gamblers.
<table style="padding: 5px 0pt 0pt 15px;" width="1%" align="right" border="0" cellpadding="0" cellspacing="0"><tbody><tr><td>
</td></tr></tbody></table>
Though taking a beating in Wednesday trading, WaMu<script type="text/javascript">cnbc_comboQuoteMove('popup_WAMUQ_ID0EVEAC15839609');</script>[WAMUQ 0.446
WaMu shares have risen 181 percent in the past month and 1,760 percent in the past year—good news if you've been speculating on the stock during that time but bad if you bought in when it was trading at $2.26 when it first entered bankruptcy and even worse if you came in at historical highs of $46 a share in 2003.
It's been some feat, though, for a former banking titan and now bankrupt company that came to represent the worst of bank risk-taking during the collapse of the nation's financial system.
Traders optimistic over a series of court battles to recover value for common shareholders have been at the center of the stock's improbable rise.
"It's a cheap lottery ticket if there somehow miraculously is a payoff to the common shareholders," said Kevin Starke, an analyst at CRT Capital Group in Stamford, Conn. who has been following the WaMU situation closely. "That is one element you see in bankruptcy situations generally."
Starke thinks investors who believe that common shareholders will recoup value are probably kidding themselves. Holders of corporate bonds and preferred shares will be first in line should JPMorgan return money to investors, with common shareholders a distant third.
Still, trading in the zombie or near-zombie stocks has been a popular sport on Wall Street since the financial industry tanked. Shares of the holding company representing deceased Wall Street titan Lehman Brothers <script type="text/javascript">cnbc_comboQuoteMove('popup_LEHMQ_ID0EFGAE15839609');</script>[LEHMQ 0.1435
"At this point it really looks like everyone is leaping onto any type of risk they can," said Yousef Abbasi, financial desk analyst at Execution Noble in New York. "People are using it as a trading vehicle."
Indeed, traders have coalesced around WaMu, which now trades over the counter on the pink sheets but is moving this week at volumes more closely affiliated with market giants like Bank of America <script type="text/javascript">cnbc_comboQuoteMove('popup_BAC_ID0EPLAE15839609');</script>[BAC 17.18
WaMu volume hit a post-bankruptcy high Tuesday of 141 million shares.
Other financials that got hit during the crisis have gained this week, among them Citigroup <script type="text/javascript">cnbc_comboQuoteMove('popup_C_ID0EZQAE15839609');</script>[C 3.95
The legal battles between WaMu and JPMorgan revolve around two issues: A dispute over a $3.7 billion bank deposit and a related contention from some investors that the company has as much as $12 billion above and beyond what it owes creditors.
Some believe that WaMu was the victim of a bank run and dispute the validity of the FDIC shuttering the institution and brokering the deal with JPMorgan.
CRT's Starke said the hopes are being perpetrated on Internet message boards from those trying to manipulate stock prices by pumping up hopes for a JPMorgan payout to common shareholders.
"That is likely to be proven untrue and fraudulent," he said of the rumors.
© 2010 CNBC.com
The guys over on the iHub board are having a coronary over that article. :lolBIG: These are the same guys who brag about being 'longs' and how the daily pps means nothing. At least that board is good for some comic relief.
If we get a settlement and the commons (UQs) are in the money, I wont be selling the first day. I'll likely wait a few days and might even buy more. Reason being because if there's a settlement and the UQs are worth $X, then technically they shouldnt sell for less than this amount. However, there's always the potential the EC is not happy with the amount and push for more money ... in which case the UQs could potentially see even more money (think Bear Stearns, $2 offer, then $10 offer a few days later).
But, I'm sure most people will be selling all or the majority of their shares immediately. I'd probably recommend taking 33-50% off and waiting a bit longer to see if another offer is made.
24 Hours of Tension
**Hearing 3/12/2010 - Phone Details and Audio Archive
LISTEN LIVE:
Dial-in at 10:55AM EST
Hearing begins at 11:00AM EST
The bridge number is 712-432-1001 and when prompted for the access code enter 477420980
You will hear no music just an intermittent beep until you join the call to the hearing.
AUDIO ARCHIVE:
To be notified as the audio archives become available:
http://twitter.com/WaMuAudio
:toast:
**Hearing 3/12/2010 - Phone Details and Audio Archive
LISTEN LIVE:
Dial-in at 10:55AM EST
Hearing begins at 11:00AM EST
The bridge number is 712-432-1001 and when prompted for the access code enter 477420980
You will hear no music just an intermittent beep until you join the call to the hearing.
AUDIO ARCHIVE:
To be notified as the audio archives become available:
http://twitter.com/WaMuAudio
:toast:
i just dont understand teh games they are playing here. so close they just keep dropping the price on such small trade lots. who is selling all these shares in the last couple days. people really selling 400 shares to make 25.00?
wierd.
i am holding to the end game so the run up meant nothing. a ton of money has come into the stock and there are some upset people who bought lots at .70 only to have MM drop it like its not hot.
gl to the longs. tommorrow is an important day for PPS for sure. no good news and we might test .20 again. so guess we will be loading up up again.
wierd.
i am holding to the end game so the run up meant nothing. a ton of money has come into the stock and there are some upset people who bought lots at .70 only to have MM drop it like its not hot.
gl to the longs. tommorrow is an important day for PPS for sure. no good news and we might test .20 again. so guess we will be loading up up again.
Apparently the hearing for MONDAY March 15th has been cancelled?
TOMORROWS COURT STILL ON!
It's the omnibus hearing on Monday that has been canceled. But it states that:
"With the Permission of the court this hearing is canceled as there are no matters going forward."
This could possibly mean SETTLEMENT THIS WEEKEND? Something may have already been reached in principle and the details will be worked on over the weekend? IMO this is great news. GL guys, this could be it.
TOMORROWS COURT STILL ON!
It's the omnibus hearing on Monday that has been canceled. But it states that:
"With the Permission of the court this hearing is canceled as there are no matters going forward."
This could possibly mean SETTLEMENT THIS WEEKEND? Something may have already been reached in principle and the details will be worked on over the weekend? IMO this is great news. GL guys, this could be it.
I didn't even realize there was a hearing on Monday? I don't think it's on the calendar. Depending on what the agenda was, I don't know how significant the cancellation is. Maybe it was just cancelled because one of the parties can't make it or something stupid like that? Or maybe they are delaying that hearing because they think they are making more progress and are going to announce another delay tomorrow?
I hope this it. It would be nice if they could get the damn thing over with and stop playing with people's emotions. Given everything that has gone on so far though, I'm kind of skeptical.
The more I look at it, I don't think there was ever a hearing on the 15th. I think there is one on the 18th, but not the 15th. I'm guessing somebody is just screwing with people to get them excited over nothing. Kind of like the other day when somebody posted a Photoshopped Bloomberg article that said something like "JPM reaches settlement deal with Wamu Inc." I could be wrong and it could be true, but I don't think so. There are a lot of a-holes that like to mess with people like this when cases get close to being done.
Also, slightly unrelated, if/when a settlement is finally reached, insiders will know about it before the general public does. They will buy shares like crazy, causing the PPS to skyrocket. The stock is actually down today, so I doubt anything has happened. I know yesterday I said the stock is manipulated and can be kept down when they want to keep it down, but in the case of settlement they would be buying like gangbusters, IMO.
Also, slightly unrelated, if/when a settlement is finally reached, insiders will know about it before the general public does. They will buy shares like crazy, causing the PPS to skyrocket. The stock is actually down today, so I doubt anything has happened. I know yesterday I said the stock is manipulated and can be kept down when they want to keep it down, but in the case of settlement they would be buying like gangbusters, IMO.
Ok, I did find this post on another board about the 15th, and I swear this will be my last post on the subject @)
There were 2 items on the March 15 agenda. The status on both items state: "The hearing on this matter has been adjourned to date to be determined. The parties intend to submit a revised form of scheduling order under certification of counsel."
There were 2 items on the March 15 agenda. The status on both items state: "The hearing on this matter has been adjourned to date to be determined. The parties intend to submit a revised form of scheduling order under certification of counsel."
March 15th 2010
**cancelled** Court hearing, Omnibus (Del): "With the permission of the Court this hearing is cancelled as there are no matters going forward." On the agenda (all "adjourned to date to be determined"):
- 5th Omni Objection: many claims
- 6th Omni Ojbection: many claims
-----------------------------------------------------------
March 12th 2010
Court hearing, 11:00 AM (Del). Continued from 3/4 by agreement of all parties (Rosen, 3/4: "...there may be availability at 11 AM next Friday and we would be prepared to go forward, and expect to go forward at that time, unless there was a global understanding between the three parties"). On the agenda:
-- FDIC-R motion (the "9.5 Motion") (11/17) to modify automatic stay so it can take possession of the $4 billion cash; status: "The hearing on this matter is going forward."
-- WMI motion for summary judgement on $4B turnover; status: "Ruling to be rendered."
**cancelled** Court hearing, Omnibus (Del): "With the permission of the Court this hearing is cancelled as there are no matters going forward." On the agenda (all "adjourned to date to be determined"):
- 5th Omni Objection: many claims
- 6th Omni Ojbection: many claims
-----------------------------------------------------------
March 12th 2010
Court hearing, 11:00 AM (Del). Continued from 3/4 by agreement of all parties (Rosen, 3/4: "...there may be availability at 11 AM next Friday and we would be prepared to go forward, and expect to go forward at that time, unless there was a global understanding between the three parties"). On the agenda:
-- FDIC-R motion (the "9.5 Motion") (11/17) to modify automatic stay so it can take possession of the $4 billion cash; status: "The hearing on this matter is going forward."
-- WMI motion for summary judgement on $4B turnover; status: "Ruling to be rendered."
Thanks, kuwlness. Yeah, apparently there was something on the agenda for the 15th. I think they just cancelled it because they never accomplish anything at those omnibus hearings anyway. :lolBIG: That's a joke, by the way.
It seems odd that, if they were getting close to settlement or had already reached, that they would cancel the hearing on the 15th but not the one on the 18th? Why wouldn't you just cancel everything if you knew the deal had been reached? I guess that's why I'm skeptical as to it actually being resolved. Or did the hearing from the 18th get moved up to the 15th?
It seems odd that, if they were getting close to settlement or had already reached, that they would cancel the hearing on the 15th but not the one on the 18th? Why wouldn't you just cancel everything if you knew the deal had been reached? I guess that's why I'm skeptical as to it actually being resolved. Or did the hearing from the 18th get moved up to the 15th?
Nothing ever does get accomplished at the Omnibus hearings, lol.
I'm doubtful there will be a settlement tomorrow, but getting the $4B turned over would really light a fire under the WaMu stocks imo. Just knowing this has been ruled on would fuel the speculation that the commons will be in the money.
Yesterday's piece on CNBC was pretty humorous. Sure seems odd they're going out of their way to start putting out a little coverage now so close to the end. Why bash a stock if it's a zombie stock and dead money unless you have an ulterior motive?
If you havent seen the webclip, here's the link: http://www.cnbc.com/id/15840232?video=1437195541&play=1
And remember, these types of deals usually happen on a Sunday night, sure dont want to be shareless over the weekend.
Thanks for the response. I completely agree, WAMU is looking good for the $4B.
Yeah, I saw that CNBC gimmick yesterday. Man, talk about grasping at straws! They don't cover WAMU at all since they were taken over, then they release a negative article AND a video 2 days before the SJ hearing (and amongst rumors of a settlement, as well). Pretty funny.
The only thing I wonder about is that March 22nd date, when Chase employees have to have all their old WAMU stock moved to Chase. It seems to me that JPM would try to do everything they can to push a settlement back until after the 22nd, that way they wouldn't have to pay their employees millions of dollars for owning WAMU stock. Then again, maybe they are just ready to be done with it?
Should be interesting tomorrow!
