What will we miss most about the last few years? Well, the list is long, but high up on it is Bill Ackman’s skewing of MBIA. That trade was a brutally long campaign, and caught Ackman a lot of flak from MBIA’s PR efforts, but it paid off in the end. Apparently, he has unwound it, finally. Waiting on the last two dollars might have been bouncing the rubble. After a 78% drop in 2008, I’d think about unwinding too. Then again, while he’s been in MBIA with Pershing Square for some time, his short view on the stock dates back much longer: seven years or so.
Ackman first thought MBIA’s stock and bonds would fall in 2002 when he oversaw Gotham Partners, a New York-based investment firm. He wrote a 62-page report casting doubt on the AAA ratings at MBIA’s insurance unit, and last year seven bond insurers lost top rankings as losses on securities backed by subprime mortgages soared.
Sexy graphs after the jump.
Pershing Square’s Ackman Ends 7-Year Bet Against MBIA [Bloomberg]
Jay Brown can drink the dishwater out of Bill Ackman’s sham wow.
Buy MBIA really fast, if something gets in your way…turn.
If he was short for years, he must have been payign out an awful lot of dividends on his borrow – I wonder what his total ROR was on that one; impressive, surely, but 78%/6 years = well, not as much as a 62-page opus would indicate.
’03-07 must’ve been pretty gut wrenching
Top 10 scared traders:
http://www.time.com/time/photogallery/0,29307,1849374_1779304,00.html
– Vince
A 62-page report? Get it down to 3 paragraphs, otherwise it’s a symptom of too much grad school.
Two dollars; didn’t read.
ep. get it over with and bag this guy, will ya. your inches of text generally drip in his direction.
it won’t be so great once he moans and finishes, and then perhaps you can get back to reporting without the strange tingling down below.
dailybail
http://lonestartimes.com/images/Benzion/April_06/2_Dollars__1_.JPG
“Posted by guest, Jan 26, 2009 12:44PM
ep. get it over with and bag this guy, will ya. your inches of text generally drip in his direction.
it won’t be so great once he moans and finishes, and then perhaps you can get back to reporting without the strange tingling down below.
dailybail”
You can call us any time, Ackie!
@ 3, are you really that dumb?
Please post Greenlight’s letter.
Not only was Ackman right about MBIA, he was right on the entire monoline business model. MBIA used it’s pull with SEC and NYS Insurance Regulator to go after Ackman and Gotham.
So you want more regulation in a post TARP world? How did it work out with MBIA? You have a guy telling the truth and they go after him like they are the mob.
MBIA is dead. They have no busiess and will eventually collapse. But right now Eric Dinallo and his band of retarded regulators are keeping the lights on in Armonk. So they still have access to the check book when a 4th graded can see that they will never have any new business and will not survivie the wave of defaults hitting MBIA insurance policies.
Thank you Billy Boy Ackman. You told the truth and exposes how corrupt the rating agencies had become and how this would eventually fall apart. If only people has listened to you 7 years ago we could have avoided the mess we are in right now.
62 page report? What’s a little boy like you doing with big boy smut like this?
If you don’t get that, you’re Better Off Dead!
Any news on how Warburg Pincus is feeling about putting money into MBIA in December ’07?
Put it this way. That guy sitting next to you in coach class from SFO to JFK just might be David Coulter from WP. Since they are a private firm they don’t have to report results, but my guess is that he is not a well liked man at Warburg Pincus.
Under the agreement, Warburg Pincus will make an initial investment of $500
million in MBIA through the acquisition of 16.1 million shares of MBIA common
stock at a price of $31.00 per share, which represents a 3 percent premium to the $30.00 a share closing price of MBIA common stock on the New York Stock
Exchange on Friday, December 7, 2007.
January 26, 2009 and MBIA is at $3.52. You do the math. WP has 2 very pissed off people on the board of MBIA. It was like getting on the Titanic on the last stop.
The paperboy who is seeking the two buck’s name in the movie is, wait for it, Johnny Garparini. Long lost relative of Gasbags?
Ackman was right about the STOCK. But MBIA was supposed to be out of cash 6 months ago. Hasn’t happened.
It is still paying claims and will be paying them for a hell of a long time.
People should pay a little more attention to this.
What is the difference between these firms and the investment banks?
The difference is the funding mechanism — Insurers collected in advance and investment banks borrow short to lend long.
The only point of this is to note that all financials aren’t the same.
Also, the underlying statutory companies (state regulated insurers) were a lot more conservative and robust then the typically leveraged financial institutions. There is some good news in this.
Not for the common equity holders though.