So what happens to Washington Mutual (WM) common stockholders?
If a company goes bankrupt, common stockholders are last in line for repayment, but that isn't what happened here. WaMu was taken over by FDIC and sold to another bank. Will we be offered shares of JP Morgan Chase, or will we experience a 100% loss?
Heathen - that's what I believe, as well. I was hoping that the bailout would go through before the bank failed. Actually, I'm watching CNBC right now which is describing the stock as "wiped" (out). I guess I'm getting a writeoff on my taxes in a few months...
Gamigirl, I hope your friend is right, but I believe that only applies to preferred stock holders.
- HeathenLv 51 decade agoFavorite Answer
Can't wait to see the definitive answer, but here goes:
WaMu's ACCOUNTS were sold to JP Morgan, not the company. You will not get shares of JP Morgan. What you have stock in is a bank with no assets. All WaMu is worth now is its tangible assets (buildings, furniture, etc.). When all that is sold, it will be divided among the shareholders (common stock generally being the last to get money).
The stock you own is basically worthless. Sorry.
- 1 decade ago
I was extremely concerned about my stocks as well. Out of all the banks failures, WM shareholders got screwed the most! Even Lehman Brothers who has filed for chapter 11 have some value in their stock. The FDIC had no choice but to shut WM operations down because if the banks were allowed to remain open then the FDIC would been be stuck with a 60 billion dollar bill! So the scum bags at both the FDIC and JPMorgan cut a deal for a ridiculously low price of 1.9B. I called the FDIC to see what would happen to my stocks and they said that the stocks have NOT been acquired by JPM in the deal - only the good assets. So technically there is still a company called WM but it is worthless. FDIC also told me that the stockholders would be getting a letter explaining what we would be entitled to them. Thanks to John Mcain and his political antics there was no bailout and therefore WM sunk.
Another belief among Wall street is that there no need to feel bad for the stockholders because they were "high risk" investors. I think this whole deal stinks and wouldn't be surprised if a class action suit is filed against JPM and the FDIC. What I am not sure of is? if the bailout can have any positive effect on our stocks? BTW, the 3 week old Wamu CEO is entitled to 11 mil dollars....disgusting
- 1 decade ago
Dear Christopher G, My understanding is that the WaMu stock will become JP Morgan Chase stock. It will be absorbed into JP Morgan Chase. I think we all have to be patient and not run scared although it is scary. I would hate for history to repeat itself and everyone make a run on their bank. So say a prayer and hold on, I think it is going to get much wilder as the time goes on, but you know us Americans, we try so hard to take care of everybody else and we need to be taking out our own trash. Take care. By the way I saw my nephrologist and right now everything is aokay, better than it was last year. It seems that the person who gave me the test results should not be giving out info she doesn't know much about.
- 1 decade ago
am i the only one who feels our government no longer fears the people. could they be any less concerned with doing the right thing? seems more than coincidental ...JPM in talks to buy WM, but no deal then feds grab and sell part to JPM.......why have i been hearing about WM's bad debt and near collapse for the last month on every newspaper,news broadcast and radio station under the sun. seems to me orchestrated. feds cite a run on the banks assets in the last ten days as reason for intervention perhaps WM was done in by the media speculation and fed "leaks" the source of the media driven fear. not a clue as to what end but I will disinvest all US stocks i hold as i shift investing strategies........i will buy precious metals and bullets which i believe will be the only currency accepted if these companies are allowed to form new type of monopoly. remember when our government fought to keep free and fair markets, it seems as though they are determined to create three mega-banks by deceit, disinformation and fraud. yep, i am off my meds and my nut
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- Anonymous4 years ago
because the corporate replaced into "compelled" into failure, its' inventory is valueless as in "no fee". every person who had any style of funding promptly or circuitously concerning to their inventory lost its fee. In a 401k as an celebration, in case you had a mutual fund that had a number of its inventory in WaMu stocks, the fee of the inventory decreases your funding at the same time as it is going to "0". in case you owned the inventory promptly, it really is valueless.
- Janice CLv 51 decade ago
I think you get nothing.