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The sell-off in MBIA (MBI) is likely overdone, suggests BTIG, as Bank of America's (BAC) tender...

The sell-off in MBIA (MBI) is likely overdone, suggests BTIG, as Bank of America's (BAC) tender suggets a power play to mask the bank's own vulnerability. The analysts believe MBIA's deep-pocketed friends could band together to top BofA's offer. MBI -2.1% premarket after plunging 19% on the news yesterday.
Comments (2)
  • JeffreyLangBoyd
    , contributor
    Comments (663) | Send Message
     
    What deep pocketed friends would band together to top the offer made on those bonds? I'm sure he is referring to Fairholme but if Fairholme would do this without being compensated by MBIA in some fashion I would sure be angry if I were a Fairholme investor.

     

    Let's not forget too, that they will probably have to do it for each of the other bond series too.
    14 Nov 2012, 10:11 AM Reply Like
  • fxfx
    , contributor
    Comments (1052) | Send Message
     
    Well, it would support Fairholme's huge investments in the common and of course its existing bond holdings.
    Fairholme already owns considerable chunks of other bonds series and BofA only made an offer for one series - where Fairholme has only a little stake and which is the farthest out (hence giving investors the biggest incentive to tender it now - and maybe switch into another bond series later).
    That being said, i don't believe in such a scenario. I don't think Berkowitz sees a reason to do this and I could imagine he didn't want to get directly involved in the BAC vs MBIA showdown.
    19 Nov 2012, 05:27 AM Reply Like
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