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Troy Racki

 
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  • WaMu Seesaws On M&A Speculation [View article]
    Thanks for all of your hard work Joyce in getting the equity committee formed. If it was not for your efforts equity may have gotten nothing at all out of the reorganization.
    Mar 24 08:19 PM | 7 Likes Like |Link to Comment
  • 4 Stocks That Should Outperform The Market [View article]
    Nice to see someone else covering WMIH after being the only writer for years. I wonder what KKR has in store for WMIH in 2014?
    Dec 30 10:17 PM | 2 Likes Like |Link to Comment
  • Dissecting The Washington Mutual KKR Deal [View article]
    WMIH, when it concludes its first merger, will likely acquire the other company's name, symbol, and exchange. For example, SBC took over AT&T but kept the AT&T name and symbol. I doubt WMIH wants to keep a name that is tied to FDIC seizure. With the recent KKR Financial buy out by KKR, I wonder if WMIH is going to be vacuumed up completely by KKR, just not 26%.

    Time will tell.
    Dec 23 06:23 PM | 3 Likes Like |Link to Comment
  • Dissecting The Washington Mutual KKR Deal [View article]
    Given your strong opinion, I would encourage you to write a piece for Seeking Alpha on WMIH along with any price targets you may have.
    Dec 20 02:52 PM | 1 Like Like |Link to Comment
  • Dissecting The Washington Mutual KKR Deal [View article]
    If the NOLs are valued at $1.10/share, why would KKR pay full value for them? They would pay less than $1.10. So they must value them more than $1.10. Their warrants are a $1.38/share (blended) strike price. That indicates again, more value to the NOLs than $1.38 because who would want a strike at company's full value? I don't see KKR getting involved if they can't at least double their money. So far they almost have.
    Dec 18 11:48 PM | 3 Likes Like |Link to Comment
  • Dissecting The Washington Mutual KKR Deal [View article]
    1. Yes, the warrants do not exist yet. Nothing exists yet. The deal could fall through tomorrow. This entire article assumes the deal will go through. KKR will immediately bank a lot of profits on their warrants if it does go through. I can't see them turning back now at this point. Do you?

    2. KKR is planning to put up $95M for 26% of the company. If share prices continue to rise as they do, if a 3rd party is going to be brought in, they are going to be paying more than what KKR does. The whole $1B for 42% is ambiguous like I said but I ran the numbers for it regardless to see what share value it produced. There's no assurance it will get that valuation so that's why I included a more grounded $2.99/share figures.
    Dec 18 11:45 PM | 4 Likes Like |Link to Comment
  • Dissecting The Washington Mutual KKR Deal [View article]
    Your buying criteria states NOLs at zero value. WMIH is a NOL and nothing more. So there appears to be no reason to buy WMIH based on your buying criteria.
    Dec 18 11:04 AM | 4 Likes Like |Link to Comment
  • Dissecting The Washington Mutual KKR Deal [View article]
    Such as?
    Dec 18 11:01 AM | 3 Likes Like |Link to Comment
  • Dissecting The Washington Mutual KKR Deal [View article]
    To each their own. For every buyer there is a seller. Good luck with your short.
    Dec 18 02:21 AM | 5 Likes Like |Link to Comment
  • Dissecting The Washington Mutual KKR Deal [View article]
    If you assign $0 value, then by all means short this to oblivion.
    Meanwhile KKR, a $7.2B company, is putting up $95M in preferred and warrants. In a "ZERO" company?

    I'm going to side with KKR on this one.
    Dec 17 09:57 PM | 5 Likes Like |Link to Comment
  • Dissecting The Washington Mutual KKR Deal [View article]
    Actually this isn't really a bank stock. It's a NOL stock. It's a pure value play on the book value of WMIH's NOL. As long as its trading below $3/share, you are buying cash for less than 100 cents on the dollar. Once WMIH's NOL has been fully harvested then its a matter of what is the company's value moving forward and what line of business are they in. My analysis may totally change then but for now, as long as "cash" is on "sale" it seems like a no brainer to me.
    Dec 17 02:22 AM | 6 Likes Like |Link to Comment
  • Dissecting The Washington Mutual KKR Deal [View article]
    Hi Melt,

    I saw the news on USA Today and as soon as I saw it I went, "woah" to myself. The news is available on most major junkets including ABC News and the WSJ. Absorbing the financial arm means that it now does business as a financial co. just like WMIH is a financial co. Similar businesses means they can merge without IRS NOL rules being triggered. KKR might just take the whole of WMIH for NOL usage. With MLPs, taxes are done differently. MLPs typically happen with energy companies which pass both the profits and the tax burden onto its shareholders. I have shares in Kinder Morgan and receive K1s and have to pay taxes on the profits. If KKR takes on WMIH's NOLs it just means that its shareholders would affected as if they were the company. They would show an ordinary business loss which would cancel ordinary business income, meaning they would not have to pay taxes on that income, saving them X cents on the dollar where X is equal to their individual tax rate. Since tax rates vary from shareholder to shareholder, NOLs are of more value to corps with a high effective tax rate than those with a different tax structure like a MLP.

    -TR
    Dec 16 10:40 PM | 4 Likes Like |Link to Comment
  • Dissecting The Washington Mutual KKR Deal [View article]
    Class 16 (PEIRS) are actually junior subordinated bonds, so they are their own class of creditor. Class 19 are the shareholders. Preferred and common used to have their own classes, but they have now been lumped together. Class 19 has also been a dumping ground for the judge if she doesn't want to keep something as class 12 but doesn't want to have a lengthy battle over it. A lot of bogus claims have been shoved down to 19 to keep the judge from having to make a lot of definite rulings. Instead class 19 keeps the claim "alive" and gives it a "we will cross that bridge when we get there" status but right now no one is worried about the claims because there isn't any money to pay them at this time. If and when there is any money to pay class 19, expect all sorts of lawyers to come flocking to Delaware to rack up their professional fees for whatever tiny slice they think they can carve out for whom they represent. It's hard to imagine that after they are done billing that there will be anything left for anyone in Class 19. Hopefully so, for those who have "escrow" shares, but don't hold your breath.

    I used to be an adjunct professor but moved to a different region because of the economics of teaching. After teaching at a major institution, the local community college is just not the same.
    Dec 15 11:38 PM | 2 Likes Like |Link to Comment
  • Dissecting The Washington Mutual KKR Deal [View article]
    Mr. Melt,

    Individuals whom purchased WAMPQ, WAMKQ, or WAMUQ shares prior to the February 9, 2012, "ex-date" (see SA article) and signed the releases received two kinds of shares in return. WMIH and "escrow" shares. WMIH shares were immediately tradable and is the new company going forward (and focus of the above article). "Escrow" shares are not tradable, nor ever will be, and carry market values of N/A in accounts. Seeking Alpha only publishes actionable news and since "escrow" shares are frozen and non-actionable, reporting on them makes minimal sense. "Escrow" shares are merely placeholders to determine how much one should receive if there are any remaining estate monies once all creditors have been paid off. "LTI" refers to Liquidating Trust Interests. The WaMu liquidating trust is a pot of money that has been established to pay off claims. Currently everyone has been paid off except for class 12 employee claims, Class 16 WAHUQ claims, and Class 18 claims. Right now the best estimates are that all Class 16 claims will be paid in full sans $2M. Should class 12 claims be further reduced than what has been projected already, then there will be money available to reach class 18. Class 18 has an unknown amount due to it, but is at least $27M. Consequently the liquidating trust will have to find another $29M before common and preferred shareholders will receive anything at a 25/75 split.

    A number of heated messages have been reaching my inbox regarding "escrow" shares. It appears that some retail shareholders sold all their WMIH shares not fully understanding that made up the vast majority of their recovery and are expecting to receive monies from their "escrow" shares instead. Unfortunately these shareholders have been mislead by online message boards that spread rampant misinformation to either pump or dump share prices and are unlikely to recover the monies they lost from pre-seizure WaMu shares unless they buy and hold WMIH shares until they reach their true value (which is detailed above). I extend my deepest sympathies to those whom have been seriously and willfully mislead by others for financial gain.

    Hopefully this answers your questions, if not feel free to ask additional ones below.

    Respectfully,
    Troy Racki
    Dec 15 09:42 PM | 5 Likes Like |Link to Comment
  • The Wait Continues For WaMu Shareholders [View article]
    I am currently working on a break down of the new WMIH/KKR deal.
    Dec 15 01:56 AM | 1 Like Like |Link to Comment
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