British Hedgefund Buys $500 million in WaMu Stock…Not Really

Posted on July 31st, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage's Personal Opinions/Research

By the way, they lost SEVEN TIMES this in Q2 alone.

Nobody BOUGHT $500 million in stock (they actually paid much more than that!) I chose the headline for the story to get more people to read the real stories herein.

This ‘investor’ now owns around $500 million at today’s price, but this is not their first buy. They are significantly underwater in their total WaMu trade.  The only reason I even care about this story is because of the irresponsible ‘journalism’ by CNBC for an hour calling this deal ‘incredible’, speculating about how great this is for WaMu and flashing ‘Alerts’ every other minute. If shorts get penalized for stock market manipulation, why aren’t actions like this punished? 

Today’s relentless cheerleading coverage of this non-event was not only irresponsible but lacked research and any sense of understanding of the stock market and how larger investors operate.  This fund added to their underwater position, which triggered an SEC filing. Simple.

It is actions like this by the press that hurts all investors, especially those buying the stock on the breaking hype in most cases. In trying to uncover a story first and always presentING the ‘glass half full’ they did their best to make this sound as if this was a game changer for WaMu. This spiked the share price for 15 minutes and everyone who chased the stock up were red by the end of the day.

This ‘news’ means absolutely nothing. WaMu does not get one penny. Toscafund is already in WaMu. They bought at a much higher price in the past and as part of the $7 billion capital raise a few months back. They did not buy 105 million shares today, yesterday or even last month. 

“Tosca has had poor performance, falling by more than 15 per cent in the year to the end of May thanks to a bet that banks and housebuilders would recover. But three investors said they expected losses from Wednesday’s sharp share price moves to be at least partially offset by successful short positions held by the fund. “It looks like they are taking a big beating, whatever the reason is,” one said.

Shares hit badly where Tosca is known or thought to have a large stake include Aberdeen Asset Management, Royal Bank of Scotland, Redrow and Taylor Wimpey. Redrow fell almost 19 per cent, Aberdeen and RBS lost 9 per cent and Taylor Wimpey 19 per cent. But one holding, Amec, rose slightly.”

Even if WaMu were to get all of this whopping $500 million (this is not the case), they LOST SEVEN TIMES that in the last quarter alone. Dozens of other funds including Tosca have invested $10S of millions or more all the way down from $40.

CBNC has turned into a no substance variety show that is only out to get a response with shock and awe headlines that mean nothing. Sorry for the rant, but what is going on is absolutely irresponsible ‘journalism’ that should not be taken seriously.

The constant misreporting of events to spin them into something they are not is just as bad as negative rumors. I am not short WaMu but may enter via puts if it goes any higher.

If you want the TRUTH on WaMu read these:

WaMu: Liquidity Options Running Low

WaMu: Martin Weiss Confirms Views on WaMu and Wachovia

-Best Mr Mortgage


Toscafund Asset Management LLP on Thursday reported holding a 6% passive stake in Washington Mutual Inc. (WM), according to a Schedule 13G filed with the Securities and Exchange Commission.

Toscafund beneficially held about 105.5 million shares of Washington Mutual as of July 16, Thursday’s SEC filing said.

Toscafund also reported holding a 5.1% passive stake in Sovereign Bancorp Inc. (SOV), according to a separate filing Thursday.

The stakes were reported on forms for passive investors, or those who don’t seek to change or influence a company.

Shares of Washington Mutual, the nation’s largest thrift, were trading Thursday afternoon at $5.12, up 38 cents, or 8%. Shares of Sovereign Bancorp were trading at $9.69, up 7 cents.

20 Responses to “British Hedgefund Buys $500 million in WaMu Stock…Not Really”

  1. Good. It proves that the Brits are real stupid persons.

  2. People, person. No. Real stupid jerks. The average english hedge fund manager is a moron and a twit. Absolutely. So what. Stupid british financial industry moron. Hope you lose everything.

  3. Only respectable investors that are talking heads are peter schiff and jim rogers.

  4. SEC filings only show longs. They could be totally boxed or even short, and you wouldn’t be able to tell.

  5. Hey Marc Anthony – what are your Brittish brothers doing man?

  6. Mr. M – you mean the $1 billion in bonds that MBIA raised a few months ago? You know, the one where MBIA (a AAA rated company at the time) had to offer 14% on a 2030 something bond.

    Any idea where that bond is trading now? Last I saw I think it was 40..

    what a joke.

  7. […] Mr. Mortgage on the Wamu non-event, which was hyped by […]

  8. This seems to be the only real news on bubble vision today.

  9. Expect a bank failure every friday after market close for the next 3-6 months. WaMu has 3 red flags against it on wall street. They weren’t on the SEC “banned” list, they were one of the banks offering the new “covered bonds”, and last but not least, there stock price is still near its all time lows while other banks like BAC and WFC have jumped considerably. Survival of the fittest. BAC is the biggest, and its only reasonable that BAC will survive while other smaller banks will fall by the way side and more investors will put their deposits into BAC.

  10. Sorry, meant to say WaMu wasn’t one the banks offering the new covered bonds (BAC, C, JPM, and WFC were the banks offering the new covered bonds)

  11. Mr Mortgage, I’ve been enjoying your site for the past few months. If you had to guess, what are the chances WAMU will fold or be taken over by the FDIC. Do you think the FED can surreptitiously keep them solvent?


  12. Personnally I prefer naked bonds.

  13. Everything is O.K.!
    Everything is O.K.!
    Everything is O.K.!
    I’m in my HAPPY PLACE:)
    I’m in my HAPPY PLACE:)

  14. If all of this news is correct then wouldn’t WAMU be insolvent just like Freddie and Fannie are in regards to general accounting standards… no?

    Speaking of Fannie and Freddie, did anyone else see this from Greenspan on these two?

    Fannie Mae and Freddie Mac, the largest sources of money for U.S. home loans, are a “major accident waiting to happen,’’ Greenspan said. “The solution’’ is the “nationalization’’ of the companies, a restructuring involving an infusion of taxpayer money and eventual sale back to the market as “five or 10 separate entities,’’ he said.

    I am so happy to see he is such a big help from the sidelines. I only wish he showed up for work when he was getting paid to help…

  15. Who cares ! The MOBSTERS in Washington will wipe their asses with your money, and clean up the mess and the Wamu vomit. That’s why the market is going on this crap. Yeah this country is runned by a fine gang of mafiosi and mobsters. Numbers are unimportant.

    You only need to have protection from Al Capone Bush and Bugzy Malone Obama and everything is just fine. Who care if inflation goes to 20%. Save “tha” bankers at any price, even if bankrupts the government and the middle class.

    Jim Rogers was right about the USA. Get your money out of the country and get out of the country. It’s one of the rare occasion that I am happy to be Canadian, when I see the type of shits running the place in the US and what type of Weimar Republic policies they are adopting.

    Boy I am buying myself a log cabin deep deep in the woods, and plot of arable land. I will be looking from far away, the total madness a couple of months from now.
    WB up at 18$. “Pump and dump.”

  16. Just one word – ENRON.

  17. Marc, I guess I amd doing pretty good then because I sold my big A$# colonial and bought and now live and will retire in a literal log cabin in the deep woods… and I put my money in foreign assets 1 year ago this month.

    B-I-N-G-O for ME!!!

  18. Questions?

    What happens when everybody works for the Government?

    What happens when we no longer make anything as we slowly have become a service industry country?

    What happens when we are so taxed that we have no money left to spend on anything but neccesities?

    When we become a barter country?

    When we steal at will to survive?

    When it no longer matters what the value of literally anything is anymore…

  19. Stu, look out for bears in the woods – and Robin, the Hood (he steals from the Rich and that’s about it). Chas. Hugh Smith wrote a revealing article about living in the woods. If you’re gonna head for the woods, it’s best to travel with a pack – to watch your back and flanks. If you’re determined to go it alone, trade in your SUV for a tank first.

    B-A-N-G Oh! – you’re dead!!!

    Like I said many times before: You can run but you can’t hide! You will be smoked out (literally).

    So much for the woods.

  20. Bear Stearns–BUY BUY BUY!

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