Common Sense

Global Financial Performance

The shorts are the only thing pushing Ambac down to the current levels. When the shorts scramble to cover, you will see where the true value of the stock lies. I must say, the shorts that are still in Ambac at this point have a pain tolerance that is much higher that the average investor. When they start covering, the current price of just over $1 is going look a little silly. When covering starts you are going to see a gap of around 25% to the up side. With out shorts, Ambac would be priced north of $5 right now, most likely around $12. If you are long, you really can not beat the shorts out, they are too strong. Some advice would be to dollar cost average your position and take advantage of the under weight price provided to you by the shorts. When they decide to leave, you will be very happy that you did.

On Jul 02 10:12 AM Ishortyou wrote:

> In respect to AMBAC and MBIA, they need to keep and save all the
> cash possible including stop paying dividends, deleverage AGGRESSIVELY
> from all their risky liabilities specially those CDS-CDO's, RMBS-ABS
> of uncertain value, in order to remediate their book values, once
> their book values are sound they need to reinstate their triple A
> rating again to write new low risk public bond insurance business.
> They can also open or extend a line of credit to make sure to continue
> operations and dissipate doubts. This will also prevent further downgrades
> from rating agencies.
>
> They are already doing these, so it will take some time to deleverage
> their books from uncertainties and rewrite new business again. This
> coming back will be the best advertisement to recruit new clients.
>