Posts for Ticker ‘MBIA’

CEO’s Implied Stock Target For MBIA: $50.00 (MBI)

MBIA Inc. (NYSE: MBI) just had its "re" new CEO Joseph Brown on a CNBC interview saying that he signed back on to get MBIA’s market cap back up to $10 Billion.  He noted a base rate of $3 Billion, and we show the current market cap at almost $2 Billion.  The discrepancy is likely because of the latest financings, so we’ll go with his number over any of the quote systems since he is the CEO. 

If we take his number on a net-net "hold him to it" and imply this, that would represent a 233% return under the most general terms.  If we take that in general terms, we can imply that he wants to get this stock back up to $50.00.  As a reminder, these numbers have been rounded to very general terms and are not specific.

As far as on any more major dilutive financings, Brown essentially stated that there would be no more highly dilutive financing transactions and stated "we have 3 or 4 more things we want to do."  But he also said they don’t want to say no to new capital opportunities.  He also said that they are no longer going to be backing up these crazy derivatives and will leave that up to Wall Street.

MBIA shares closed at $15.28 today.  Its 52-week trading range is $6.75 to $72.38.  If the come-back again CEO can pull this off he will have won a major return for any buyers in the recent weeks.  But if you have been holding on since $50, $60, or even $70, well it’s just going to be a long hard decade.  Mr. Brown better make sure he lives up to goals close to those he just gave.  Making big statements on live national TV is something that gets hard to refute and hard to deny when they play the tape back in court.

Jon C. Ogg
February 26, 2008

Posted on: February 26, 2008 – 4:43 pm in Financial Stocks, ,

Bond Insurer Rescue Package From Banks? (MBI, ABK)

Ambac Financial Group Inc. (NYSE: ABK) and MBIA (NYSE: MBI) are both trading higher in pre-market trading this morning.  CNBC squeezed in a report after covering the Yahoo!-Microsoft that there are eight banks that have formed a consortium to rescue the ailing bond insurers.

MBIA is trading up roughly 12% to $17.50 and Ambac is trading up over 15% at $13.50 in pre-market trading.  We noted before how "mergers may be mandated rather than preferred" and this would fall right into that coup and conspiracy.  The counterparty risks are just too severe if one of these were to fail entirely.  Goldman Sachs recently outlined the values of potential packages.

Forming this consortium may be the banks saving their own skin rather than them just coaxing a financial opportunity.

Jon C. Ogg
February 1, 2008 

Posted on: February 1, 2008 – 8:03 am in Banking, Financial Stocks, Mergers and Buy Outs, , , , , ,

MBIA Raises Cash & Bolsters Books

MBIA Inc. (NYSE: MBI) has entered into a definitive agreement with global private equity firm Warburg Pincus to invest up to $1 billion in MBIA through a direct purchase of MBIA common stock and a backstop for a shareholder rights offering.  MBIA said the investment will increase MBIA’s "already substantial capital and claims-paying resources" and "enable MBIA to grow its business profitably at a time when market conditions present it with attractive opportunities."

What is interesting here is that the market cap for MBIA is $4.47 Billion and that is after the big pop in the stock.  It is hard to rely on the books from prior quarters because of the liquidity crunch that has been seen more sharply in recent weeks.  It had listed over $4.5 Billion in current assets with cash, short term investments and receivables, although its long-term investments were listed as just under $40 Billion.  Total liabilities were $38.79 Billion.  Obviously there are going to be some different numbers on the next report.

Shares of MBIA are up almost 19% at $35.60 after the financing pact announcement.  Its 52-week trading range is $25.84 to $76.02. 

Jon C. Ogg
December 10, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 10, 2007 – 11:28 am in Financial Stocks, , ,