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Troy Racki

 
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  • Signs Of Life For WaMu [View article]
    The $67M pending release from the WMI Liquidating Trust's disputed claim reserves did not conclude in time for the Nov 1st disbursement due to objections by claimants. While $12M was released from the litigation reserve, the Trust decided to only disburse a total of $17M to tranche-3 and hold the rest, leaving the Trust with $56M of cash (when it only needs to hold $25M). PIERS won't be receiving a payment now until Feb 1.
    Nov 3 05:10 PM | Likes Like |Link to Comment
  • Signs Of Life For WaMu [View article]
    All my sources are public information and are available for free though KCC LLC's website. The $15M payment was in the last 10-Q on page 24. The $64M payment was filed with the court as a motion for summary judgment to reduce maximum claims reserve, or something to that extent. If you can't find it on your own let me know and I'll find the URL for you. The motion's objection date was the 4th w/ no objections filed so it should be approved by month's end for the distribution which occurs on the 1st day of the 2nd month after the quarter's end. Did I get all of your questions?
    Sep 11 09:42 PM | Likes Like |Link to Comment
  • LeapFrog Enterprises, Inc.: Expensive Products; Inexpensive Shares [View article]
    LF IPOed Aug. 21, 2002 at $13/share. In Jan 2009, it sold for $.80/share. Its high since then, $12.28. Anyone unfortunate enough to buy on the IPO and hold stubbornly onto this "growth" stock has not seen any meaningful appreciation in the last 11 years. The company is going to have to start making some progress at breaking through its IPO price before burnt investors give it a second chance.
    Sep 10 12:39 AM | 1 Like Like |Link to Comment
  • The Wait Continues For WaMu Shareholders [View article]
    Hi Scott. Things currently have not changed much for WaMu. My assumption is that the BOD is waiting for IRS NOL restrictions to end prior to moving forward on a recapitalization deal. If you would like I could write an article following up on the company 13 months after my last report, there's just not going to be a ton of new info that hasn't been mentioned here in this article already.
    Aug 24 11:40 AM | Likes Like |Link to Comment
  • Regulation May Alter MMO Landscape, Part 2 [View article]
    Well said Magitek. PWE released several new updates this last week to their games. There was huge outrage on "Star Trek Online" over falsifying information. So much so that the developers had to do a large backpeddle and install the compromise they had promised all along. There also is a lot of anger at "Perfect World International" over how new game systems make previous hard to acquire virtual objects now of little value. Both games rely very heavily on the lottery system to generate revenue. On both games players are so upset that many are saying they will leave the game. This is the exact opposite of what the company should be trying to achieve. I think PWE's biggest shortcoming is their inability to listen to their customer.
    Nov 17 01:25 PM | Likes Like |Link to Comment
  • The Wait Continues For WaMu Shareholders [View article]
    There are basically two options for you at this point. Sell your 500 shares for $235 USD (minus comissions) and take the loss to offset gains elsewhere. If you have no gains for this year, you might as well wait to sell on Jan 1st and take the loss for next year where the tax burden (fiscal cliff) will likely be higher so your loss will be worth more in tax reduction. I can't see this stock moving in either direction until June 2013 when there is a shareholder meeting to discuss what acquistions the company will take on, if any, to make best use of its NOL asset. The company reported 3 cent EPS for Q3 after losing 4 cents total in Q1 and Q2. So its basically hobbling along. You can also wait until sometime after June 2013 to see if the NOL asset is materalizing or not. If it does the stock could possibly hit about $7.60/share based on $5.9B in NOLs at a 35% corporate tax rate with a 30% transaction loss rate. So either $235 or $3,804 but that second number won't likely be hinted at until June 2013 and won't materalize until September 2014. You may not want to wait that long. Also if corporate tax rates decline to 28-29% then the NOL value will decline as well.
    Nov 13 10:10 PM | Likes Like |Link to Comment
  • The Wait Continues For WaMu Shareholders [View article]
    Well, there you have it, no shareholder's meeting until June 2013. I don't expect much to happen from now until then.

    The wait continues...
    Jul 26 10:59 AM | Likes Like |Link to Comment
  • The Wait Continues For WaMu Shareholders [View article]
    PoorButHappy,

    You may be correct on the change with the articles of incorporation. The last version I saw was dated 1/25/12 and was a supplemental to POR-7 and said 6 months. If you could include a link to what you have seen that would be appreciated. This is the last statement that I have seen on the matter.

    "ARTICLE II
    MEETINGS OF SHAREHOLDERS
    2.1 Annual Meeting. An annual meeting of shareholders of the Corporation shall be held each calendar year on such date and at such time as shall be designated from time to time by the Board and stated in the notice of the meeting or in a duly executed waiver of notice of such meeting, provided, however, that the first annual meeting shall take place within six (6) months after the Effective Date (as defined in the Seventh Amended Joint Plan of Washington Mutual, Inc. and WMI Investment Corp. Pursuant to chapter 11 of the Bankruptcy Code). At such meeting, the shareholders shall, subject to Article III hereof, elect directors and transact such other business as may properly be brought before the meeting."

    As for pointing to info on the NOLs, I would recommend starting with a Google search on section 382 of the IRS code. Of potential interest are the parts about the change in ownership for the first two years. The company is severely restricted on how it goes about getting capital during that time (i.e. selling preferreds) without triggering a change in ownership event.

    WMIH could close a deal with the $125M loan tomorrow if they wanted. But to get the full extent of their NOLs will be long and meticulous process.

    If you did not release then you are on your own to try to sue the FDIC and JPM and you did not get any new common shares.
    Jul 25 03:38 PM | Likes Like |Link to Comment
  • The Wait Continues For WaMu Shareholders [View article]
    Polemarcho,

    I have also seen this conversation as well on the forums from time to time. It is much more speculative in my opinion because the Debtor nor the Equity Committee ever made any significant mention of the use of "ordinary losses" and carrying them forward like they have regarding the NOLs. The Debtor had a whole 3rd of a page in small font on the NOLs and IRC 382 alone as a footnote, with pages of legalese to accompany the NOLs explanation more broadly thereafter, even as much as they tried to lowball their value and devalue the issue in front of the judge as important to shareholders. In other words they put a lot of effort into trying to bury them. Meanwhile the mention of ordinary losses did not get a wiff. Zelin made no mention of them either in his report.

    The conversations I recall regarding the ordinary losses were upwards of 10B once the stock abandonment NOLs were added in. Besides the 6.5B of NOLs there was talk about having the payments to creditors and interest be considered "ordinary losses" as well as the professional and reorg fees. However you need to balance that opinion against another conversation concerning how the WMB stock abandonment was being disallowed by the IRS in its entirety, but they were going to allow the payments to creditors to be allowed instead as a compromise, and that the $6.5B NOLs included all allowable losses from the list above and that opposing counsel failed to differentiate.

    With all of that in mind that is why I called the NOLs "ambiguous". They and their value for shareholders really are a huge unknown at this time. And for good reason too; more "colorable" stuff can happen.

    Consequently, in the effort to being as properly perspective as possible I stuck with the most supportable numbers regarding WMIH. I write with the intent to inform and to help others increase their ROI. However your and others comments do help shed light on the outside possibilities which is good.

    Also there are complaints out there about how this is all "old information". It is. With an efficient market, everything is old information in seconds, minutes, in rare cases maybe an hour. If I had "new information" A) you would have it to OR B) it would be illegal OR C) I would be an insider and bound by non-disclosures.

    The best I can do for readers is 1) research like crazy, 2) explain things in a common sense manner, 3) add personal reflections of historical but less discoverable events, 4) wrap it all up with a bow at 1,500 words or less. Most people out there that still follow WMIH are as knowledgeable as I am because they are reading the same filings I am.

    Anyone left still standing after 46 months of this is a big fish in a small pond.
    Jul 25 01:07 PM | 1 Like Like |Link to Comment
  • The Wait Continues For WaMu Shareholders [View article]
    TDMD,

    Thank you for bringing up some good arguments. Keep in mind though that Blackstone probably has a minimum fee associated with its work product, just like how some professionals have an $X service call fee plus their hourly. WMIH may have more than a 1% commission when you take the minimum fee into account. Blackstone has already done a lot of work for the company so that may help in regards to meeting the minimum.

    As for an addendum that is unlikely. There are enough details you have brought up that it requires an article in itself. However I would like to see a little more guidance from the company prior to publishing another article i.e. either the shareholders meeting announcement or a quarterly report.
    Jul 25 10:14 AM | Likes Like |Link to Comment
  • The Wait Continues For WaMu Shareholders [View article]
    TDMD,

    You have brought up an interesting point that many shareholders have discussed on the various message boards (Yahoo! Finance comes to mind). I lurk on those boards and watch the conversations. The one that comes to mind is the talk of issuance of $5B in new preferred shares. My concern however is that the IRS is going to consider this a "change in ownership" which would kill the NOLs. WMIH would need to get a private letter ruling on this like it has already on the WMB stock abandonment. This will likely be a very difficult argument to make to get a positive response. Otherwise its a two year wait. Maybe Willingham has his answer already and he's alluding to it with the statement of "substantial cash". But Rosen said "significant recovery" and we have seen how far that has gotten. Maybe Rosen was referring to his $800/hr billables. Also, the rate on those preferreds will be overwhelming. I expect between 9% and 13%. There comes a point where harvesting the NOLs won't be cost effective with simply borrowed money.

    Sorry to say this but after 42 months of mushroom feed anyone who believes what anyone says without ample skepticism is a mushroom. I think Blackstone would stay on even if it were only a $200M deal because a 10% commission is still $20M, so we really can't use that as a barometer.

    My suspicion is that the radio silence is for a reason, likely for hedge fund advantage and more "colorable" activities. Retail is a minority partner in this. Hope for the best but expect the worst. The middle of September should be the first bit of sunshine.
    Jul 25 01:59 AM | Likes Like |Link to Comment
  • The Wait Continues For WaMu Shareholders [View article]
    Ah, sorry, I misread your question. There is a mailing address available on SEC filings and a phone number for the new corporation. I copied directly from a recent 8-K. (http://bit.ly/LMLQbN)

    1201 THIRD AVENUE, SUITE 3000
    SEATTLE, WASHINGTON 98101

    (206) 432-8887
    Jul 25 01:04 AM | Likes Like |Link to Comment
  • The Wait Continues For WaMu Shareholders [View article]
    By #, do you mean WMIH's CUSIP? It is 92936P100.
    Jul 24 08:40 PM | Likes Like |Link to Comment
  • The Wait Continues For WaMu Shareholders [View article]
    You found the P&L for WMMRC. It is a subsidiary to WMIH but it is effectively "tapped out". What equity it has remaining ($158M) has been pledged to pay off senior creditors from bankruptcy so shareholders won't see any value there.

    All that shareholders have remaining is the $75M in cash and the NOLs. Since the stock is trading above cash the only value remaining are what will become of the NOLs which no one has any certainty of, consequently it hit just $.02 over its cash value last quarter. Shares perked up a with the Blackstone announcement but info has been hard to come by otherwise. WMIH is going to need to see a shareholders meeting, quarterlies, and several acquisitions to move any higher.

    There are 200M issued common shares in WMI.
    Jul 24 07:37 PM | 1 Like Like |Link to Comment
  • The Wait Continues For WaMu Shareholders [View article]
    You made the right decision. Common shares effectively received $.013/share, so you could have lost another 87% of your money. My shares are from preferred holdings as I closed my common shares position much earlier. Both preferred and common shareholders in WaMu received just new common shares so its impossible to tell those individuals apart now.

    WaMu was a Malox type ride. Preferred shares went from a low of $1.50 to over $100 during bankruptcy, ended up getting about $19.80 as a settlement, now they trade around $9.90 worth. One day in March the stock moved from above $100 to below $9 and finished the day in the mid-$50s. An iron stomach is still going to be required on this one.

    Bottom line: They don't call it "distressed" securities trading for nothing.
    Jul 24 07:28 PM | 1 Like Like |Link to Comment
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