WMI HOLDINGS (OTCMKTS:WMIH) Stock to Watch
BY JEFF ADAMS / ON NOVEMBER 25, 2014 AT 1:26 PM /
WMI HOLDINGS(OTCMKTS:WMIH) has been moving in a bullish trend since start of the year ,2014, but the stock did saw a major bullish rally in the month of March , 2014 when it touched its high of $3.49 at a trading volume of around $642k.
After May WMIH facing downward trend till now.
The share price saw it’s highest of $3.74 while its lowest was $1.05 in last one year. The stock maintains good liquidity with average volume of 0.3 million shares per day.
WMI HOLDINGS(OTCMKTS:WMIH) announced that KKR & Co. and WMIH entered into a conditional commitment to make a strategic investment in WMIH. The KKR deal provides WMIH with significant capital to acquire a big business. The NOL makes WMIH a very attractive acquisition target, assuming a suitor is interested in purchasing WMIH just for the NOLS.
WMI HOLDINGS(OTCMKTS:WMIH) consists primarily of WM Mortgage Reinsurance Company, Inc. (“WMMRC”), a wholly-owned subsidiary of the Company that is domiciled in Hawaii. The Company’s primary business is a legacy reinsurance business that is currently operated in runoff mode by WMMRC.
WMI HOLDINGS(OTCMKTS:WMIH) announced that KKR Management Holdings L.P. and KKR Fund Holdings L.P., subsidiaries of KKR & Co. L.P. (together with its affiliates, “KKR”), have finalized a strategic investment in the Company.
Michael Willingham, Chairman of the Company said, “We believe the investment in our Company by KKR will enhance value for all shareholders of WMI Holdings. KKR has a history of investing across a wide range of asset classes and we look forward to working with the KKR team as we execute on our acquisition strategy.”
Tagar Olson, Member and Head of KKR’s Financial Services team stated, “We are pleased to finalize this investment and look forward to working with the Company as it continues to grow and diversify its platform. As a long-term aligned capital partner to the Company, we believe that KKR is well-positioned to help build shareholder value.”
On January 30, 2014, KKR (i) purchased approximately $11 million face amount of convertible preferred stock of the Company convertible into shares of common stock of the Company for a conversion price of $1.10 per share, and (ii) committed to purchase up to $150 million aggregate principal amount of subordinated 7.5% PIK notes, which may be issued in one or more tranches over a three year period, each with a seven year term from the date of initial issuance (the “Subordinated Notes”), subject to certain terms and conditions. Substantially all of the proceeds from the Subordinated Notes, if and when issued, would be used by the Company to fund future acquisitions. In connection with the commitment, KKR has received five-year warrants to purchase approximately 61.4 million shares of the Company’s common stock, 30.7 million of which has an exercise price of $1.32 per share and 30.7 million of which has an exercise price of $1.43 per share. KKR also has the right for three years to participate up to 50% in equity offerings up to an aggregate of $1 billion by the Company subject to certain limitations, including a cap on ownership by KKR of 42.5% of the Company’s common equity.
Blackstone Advisory Partners L.P. acted as financial advisor to the Company in connection with the transaction. Akin Gump Strauss Hauer & Feld LLP and Lane Powell PC are counsel to the Company. Simpson Thacher & Bartlett LLP is counsel to KKR.
WMI HOLDINGS(OTCMKTS:WMIH) is a typical development stage company with $230,787 thousand of cash and total assets of $267,238 thousand. The company has total liabilities of $202,509 thousand resulting in positive equity. WMIH trading in red yet continues to trade in impressive volume, however does not seem to be moving anywhere close to its earlier position in the near future.
Considering the fundamentals its market capitalization of $352.08 million is clearly overstated.
http://www.equitiesfocus.com/...ngs-otcmktswmih-stock-to-watch/19312/