Good Bye WaMu

I'm sure you've all heard by now that another local company has been sold. In what's been a tough week - the sale of Safeco to Liberty Mutual officially closed on Monday - the FDIC seized WaMu and later in the day it's assets were purchased by JP Morgan Chase Bank. I haven't been able to figure out what effect this will have, and most likely nobody will know for a while. But I saw that the stock has dropped to $.44 a share in after hours trading. I've been thinking about buying some but have been unable to determine what will become of the shares. I'm sure JP Morgan will right the ship, so if the shares are converted to JP Morgan stock, then it could be a good investment. On the other hand, it's possible that the shares are now worthless. Anybody with some insight is welcomed whole heartedly. And I really hope that all the WaMu employees in the area are able to retain their jobs.

**Update**
Per the Seattle PI, don't buy any WaMu stock.

It's probably worthless. Stockholders, who had already seen shares plunge 95 percent since their October 2007 high of $36.47, have the lowest priority for claims against WaMu.

"Equity investors generally get the short end of the stick on these kinds of things," said "Stock Trader's Almanac" author and publisher Jeff Hirsch. "The company goes belly up, you lose."

What little remains of the company that used to own WaMu will go toward paying off creditors ahead of common shareholders. The creditors' claims are likely to be far larger than the money available to pay them.

Preferred shareholders, and even bond-holders, are likely to get cents on the dollar. Investors who hold senior notes or other debt will be notified by the FDIC as to their treatment as claimants of the receivership."