Banking & Finance

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