Ambac Financial Group, Inc. (PINK:ABKFQ) Investors Get Optimistic
30 Dec 2010

Ambac Financial Group, Inc. (PINK:ABKFQ) stock looked somewhat revived yesterday, although the market was unconsolidated and the share price dropped again during the session to the 10 cents bottom. The overall attitude was positive anyway, seeing that level as a confirmed rock bottom.

The following trading sessions will probably show if ABKFG shares are going the see their price climbing up soon after it has lowered the trading range three times in the past two months. The stock closed at $0.105 with a 14.29% increase and the trading volume was 12.4 million, higher than the usual this month. The technical side looks very positive, at least short term, but longer term the uncertainty is high as the shares seem to be also heavily shorted these days.

According to the latest 10-Q, Ambac has increased substantially its assets, but they are still less than the liabilities and the total revenues are also declining. The latest SEC filings of the company seem to have led the share price to the $0.1 bottom, the second lowest value in the past ten years, lower being only the price to which the stock tanked on the announcement from the beginning of November that Ambac has filed for bankruptcy.

These latest filings notify about the delisting of Ambac securities from the New York Stock Exchange. Also, an 8-k filing updated the disclosures in the company’s latest 10-Q concerning the legal proceedings for securities laws violations in which Ambac former officers and directors have been involved. According to the update, Ambac and the other defendants entered into a memorandum of understanding with the lead plaintiffs. Under the MOU, the claims shall be settled against a cash payment of $27.1, $24.6 of that amount to be covered by the company’s insurance.

As the settlement is still subject to many conditions and a bankruptcy court approval, and as under the MOU the company and the other defendants do not admit any fault, liability or wrongdoing, the further news may be good for ABKFQ share price appreciation.

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