Leer este analisis de un trader habitual sobre WMIH (Copiar Google Translate)
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Here’s my game plan / thoughts.
First off, let me say that I try to not fall in love with a stock, but I’m a huge believer in this stock. Basically I see it as following big money. Tepper/Appaloosa & KKR see fit to invest, and we’re basically just riding their coattails. I am taking a long term perspective with this stock. Private equity has a 3-5 year time frame for its investments so so will I. (3-5yrs as of merger date, not my time of entry)
No price predictions, especially at this early stage. I don’t think there is enough information out now to evaluate and I’m probably not smart enough :)
If WMIH’s NOLs are to be used up, we know that the merger will be big. Easily big enough to move up to a respectable stock exchange.
There will be price gyrations, especially while on the pink sheets. Unless you’re very quick on the draw, I don’t suggest trading WMIH. We’re going to encounter gut wrenching times – further massive gains, then a large retracement. I’m going to stand pat. It’s very easy to sell a large amount of shares at a huge profit, but it’s another story to buy back same number of shares at many folds your original entry price. Plus there’s the chance you’re calling the top wrong, the run will continue and you’re holding way fewer shares. It may take some time (maybe a few/several months) for price to move back to its historic highs, but it will be worth it.
So even if I miss the trading opportunity in 2014, it won’t matter in the long term. With an announcement of uplisting, I believe stock price with be at its historic highs (or post ch11 highs). Selling anytime while it’s trading on the pinks will be unwise. I see getting a higher price while it’s trading on Nasdaq/NYSE. I will be selling to the sheep – that’s the investors of mutual funds who will be buying shares hoping it will go from ie 1x to 1.5x in 1 years’ time (and it probably will).
Avoid the noise. Yeah, lots of predictions on the message boards. Going to take everything with a grain of salt. Once listed, analyst coverage (yes, there will be) will provide insight as to general market perception/expectation. I will listen carefully and then consider my exit points.
Again, I don’t know where price will be when I sell. Could be $6, $9, $15, or even more. But I am confident that if I do sell now, I will be short changing myself. I will let market dictate the price I get (not pink sheet market).
I usually trade, but I will not with WMIH. When WMIH ran to 1.40s then retraced to $1 I had wished I had sold and rebought lower. Easy to say I guess. In hindsight, it was right to just hold (actually I bought more on that dip), and with the KKR deal, there’s even more reason to just sit on my hands in 2014.
I don’t see myself as foolhardy. I’m up over 4x my investment but WMIH type situations don’t come often. Only a huge merger will eat up $6 billion in NOLS and the price is still way cheap at $3.
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