|
|
|
||
MBIA goes back to the well again. Who will be silly enough to invest in these securities, though... |
| Written by Reggie Middleton | |
| Thursday, 07 February 2008 | |
|
From the latest MBIA securities offering prospectus: "An investment in the shares involves a high degree of risk. You should not invest unless you can afford to lose your entire investment." You'd better believe it. Let's see who'll be silly enough to actually buy these! I browsed through the prospectus of the last surplus notes offering and found that anyone who actually read the prospectus would have been a fool to have bought those notes. Well, I don't want to insult anybody who bought the notes, so let's just assume they didn't read the prospectus (which doesn't sound very bright either, but let's give MBIA investors the benefit of the doubt). They are trying to raise $750 million, when my various musings dictate they need to raise about $6 billion. Hmmm, they seem to be falling short. The last offering lost the investors over 20% of thier principal the first week of trading (just as I anticipated in my post the week before it started trading). This loss totally trumps the 14% annual return you might have gotten if the NYS Dept. of Insurance didn't curtail the payments.
Add this page to your favorite Social Bookmarking websites          Trackback(0)
Comments (8)
  written by Jon Pearlstone, February 07, 2008
Reggie
You have rewritten the book on GGP, and steered all of us very correctly on MBIA and Ambac. I can't believe GGP hasn't offered you a board seat yet! I still see AGO as worthy of your time! This think is WAY above it's lows--it's being touted as one of the two "untouchable" AAA rated companys who deal with bond insurance, and it's earnings are due next week. I know you are busy looking at homebuilders, but we all know they are horrible financially--the problem is the short interest makes those plays very difficult irrelevant of the fundamentals. AGO and closed end muni bond funds, and of course Moodys. Those areas have very little analysis done but have some great stories to implode. What do I gotta do to convince you to dig in on those? You are the best and most thorough analyst on the net (or anywhere else as far as I know) but now that you have hammered commercial and residentail real estate, I am hoping you will try to get ahead of the curve for future problems! thanks for the continued great work.
written by Justin B, February 07, 2008
even assuming that somehow they can manage to delay or even avoid a downgrade...you're talking approx 40% dilution with just this latest sale, and yet the stock is up 5% today. And they say the market is efficient. Ha!
 written by Reggie Middleton, February 07, 2008
@ moody's
You know, about 5 minutes before you made your comment, I had just hung up the phone with my analysts discussing AGO. You are right, it does seem to be defying gravity, and I am bearish on it. I just haven't ran through it with a fine tooth comb. There is more profit (at least for me) to be had with GGP, but now that we have that out of the way, AGO is a candidate. There may be others as well, but AGO has gets 58% of its earned premium from structured products!!! We must know where that story leads...
written by Rob Dawg, February 07, 2008
Reggie,
Is it too much to ask for a "matrix?" By that I mean across the top a list of factors and down the rows the subject companies. I'm thinking the Consumer Reports type of above average to below average and n/a grid. Across the gtop we can have factors like cramback and rate and loan rate and such.
written by Reggie Middleton, February 08, 2008
I can't put something like that together right now, due to time and the potential of that looking like advice.
written by eh, February 08, 2008
MBIA Share Offering Boosted to $1 Billion http://online.wsj.com/article/...52123.html
It seems the offering price is about $2 below the current market price; no wonder it was 'oversubscribed'.
Write comment
|
|
| Last Updated ( Thursday, 08 January 2009 ) |
TrackBack URI for this entry
Subscribe to this comment's feed
| < Prev | Next > |
|---|
Reggie Middleton has 3,000 subscribers, worldwide!
Visit Reggie @:
Especially after raging agencies already said they are likely to downgrade MBIA regardless of its capital standing.
...(which doesn't sound very bright either, but let's give MBIA investors the benefit of the doubt).
You have a great sense of humor about all of this.