If Ambac Insiders Bought Shares, Does It Help? (ABK)

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Ambac Financial Group, Inc. (NYSE: ABK) did manage to raise its additional $1.5 Billion in new capital as the company tries to maintain its Triple-A ratings.  Ambac priced 185.2 million common shares at $6.75 each and 5 million equity units at $50 each as Ambac tries to maintain its Triple-A ratings at S&P and Moody’s, while Fitch did ultimately lower ratings to AA and has it on review.

But after looking through the form 4 filings in the Edgar database it showed that there were insiders at Ambac who participated in the offering with them buying shares.  From what we tallied up it appears to be more than $600,000.00 on almost 100,000 shares in purchases.These may not be all of the purchases as more form 4 filings may come Monday, but here are some of them showing who acquired how many shares in the offering:

  • Chairman & CEO Michael Callen bought 25,000 shares;
  • Director Thomas C. Theobald bought 20,000 shares;
  • Director Henry D G Wallace bought 10,000 shares;
  • EVP Douglas Renfield-Miller bought 10,000 shares
  • Director Jill Considine bought 10,000 shares;
  • Director David Wallis bought 6,250 shares;
  • SVP Gregg Bienstock bought 6,000 shares;
  • EVP John Uhlein bought 5,000 shares;
  • CFO Sean Leonard bought 1,000 shares.

For whatever it is worth, CEO Michael Callen noted in a CNBC interview that Ambac had ample cash to pay claims for more than the current environment and earnings are assured for two years on its portfolio.  Filings show that new business generated so far in 2008 has been at a standstill.

Insider buying is usually hailed by Wall Street and critics have a hard time in continuing to bash a company when management plunks down its own cash to buy shares.  We don’t want to sound like disappointed brats, but as these were priced at $6.75 this total dollar amount just doesn’t exactly ring out the sounds of a major show of force.  Wanting more and more is unfortunately just the way of Wall Street.  Either way and regardless of the size, it is at least good to see management put more skin in the game.  That’s even more of the case when you consider how painful the game at Ambac has been and how long this road is going to be.

Jon C. Ogg
March 8, 2008