A Mortgage Billionaire Bids for the Commanders NFL Franchise, GSE Shareholders and Impac's Restructuring
The NFL's Commanders Franchise may sell for $7 Billion, GSE Shareholders had a setback with a mistrial in DC, Impac's preferred is going to be swapped on November 15th.
Mat Ishbia Looking to Bid on the $7 Billion Commanders Franchise
The mortgage business must not be that bad right now. United Wholesale Mortgage (UWMC) chairman and CEO Mat Ishbia is reportedly looking to bid on the Washington Commanders. The team is reported to be worth $7 billion. United Wholesale Mortgage was the nation’s number 1 mortgage lender in Q3, but the stock is trading at around $4, in the bottom of it’s 52 week range.
The Commanders price tag of $7 billion seems like a lot for a team that Dan Snyder paid $750 million to acquire in 1999. However, my excel skills tell me that this is only a 10.2% return on his money. This is less than the long-term return of the S&P500, which is 11.82%. Think of how many billions poor Dan left on the table. At least he changed the name before selling the team.
Dan Snyder was the subject of much ridicule and controversy over the years, including many years of denying the need to change the team’s name.
Fannie and Freddie Mistrial
You may have heard that a jury in a DC court was split 50/50 in their decision over whether Fannie Mae (FNMA) and Freddie Mac (FMCC) shareholders were harmed by the net worth sweep in August of 2012. This has resulted in a mistrial.
Reportedly, during the deliberations the jury asked for more time and for the judge to define words like “arbitrary.” In sworn testimony, Ed Demarco and others admitted that they didn’t seek the counsel of outside experts or accountants before implementing the net worth sweep. That seems pretty arbitrary to me.
For those of us that held the stock back then, it is probably a bit disheartening. This is especially true if you took Business Law 101 and know that a unilateral contract amendment is null and void if the parties don’t receive equal and adequate consideration. In this case, shareholders received ZERO consideration (cash, stock or other) and therefore were unfairly harmed. It’s amazing that after a decade, the courts and juries are still unwilling to see this.
You might be interested to know there is another jury trial coming up in Michigan, Rop vs FHFA and in this case, shareholders will be called to testify. (Previously, I wrote that this case was in Texas. This is an updated version with the correction made.)
Details on Impac’s November 15th Preferred Clean-up
Judging from market prices for the Impac Preferred B (IMPHP) and Preferred C shares (IMPHO), there is still some confusion about what happens on November 15th.
Impac Mortgage Holdings, Inc. Announces Date of Redemption of Series B Preferred Stock and Series C Preferred Stock
IRVINE, Calif., October 28, 2022--(BUSINESS WIRE)--Impac Mortgage Holdings, Inc. (NYSE American: IMH) (the "Company") today announced it intends to redeem all outstanding shares of the Company’s 9.375% Series B Cumulative Redeemable Preferred Stock, par value $0.01 per share (CUSIP: 45254P300) ("Series B Preferred Stock"), and all outstanding shares of the Company’s 9.125% Series C Cumulative Redeemable Preferred Stock, par value $0.01 per share (CUSIP: 45254P409) (the "Series C Preferred Stock," and together with the Series B Preferred Stock, the "Preferred Stock"). Preferred Stock held through the Depository Trust Company will be redeemed in accordance with the applicable procedures of the Depository Trust Company.
The redemption date will be November 15, 2022 (the "Redemption Date"). Each outstanding share of Series B Preferred Stock will be redeemed for (i) thirty (30) shares of the Company’s 8.25% Series D Cumulative Redeemable Preferred Stock, par value $0.01 per share ("New Preferred Stock"), and (ii) 13.33 shares of the Company’s Common Stock, par value $0.01 per share (the "Common Stock") (collectively, the "Series B Redemption Price"). Each outstanding share of Series C Preferred Stock will be redeemed for (i) one share of New Preferred Stock, (ii) 1.25 shares of Common Stock, and (ii) a 1.5 warrants to purchase the same number of shares of Common Stock at a purchase price of $5.00 per share of Common Stock (collectively, the "Series C Redemption Price," and together with the Series B Redemption Price, the "Redemption Price").
The last trade for the IMPHO shares was 25 cents a few days ago. However, on November 15th, these shares will be converted to common worth 1.25 x the market price. Yesterday’s afterhours session sent the common to $0.42 per share, meaning the converted value is $0.52. Additionally, the shareholder will receive 1.5 warrants with a strike of $5 and a 10 cent preferred D, which is expected to be redeemed for cash. This means IMPHO is trading at a steep discount to market value, which I’d estimate to be about $0.82 per share.
The last trade for the IMPHP was $4.25. These shares will be exchanged for 13.33 common shares worth $5.60 as of yesterday evening. These shares will also receive $3 per share worth of Preferred D. So, they are also trading at a steep discount. Market value is about $8.60 on the IMPHP.
You won’t likely be able to buy these shares, as the float is significantly reduced. This message is for the current stockholders that seem to be dumping the shares without understanding what they are selling.