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My hopes were high when they halted trading on MBI - now, for sure, managment would show their prowess, raising capital in an affordable way, with great results for my positions. Soon the news arrived, Warburg Pincus would provide 1 billion...what were the terms?
So sorry, to raise capital they are selling 16 million shares for 31.00 each, after buying 10 million shares over a period of years at prices averaging 66.30. Talk about a half price sale. Then they pass out the warrants to buy shares at 40.00.
The adjusted book value of the company at 9/30/2007 was 80.08 per share. By my compuations, it cost them a billion to raise a billion. They could have just accumulated the capital instead of buying back shares over the years.
Clearly I do not understand this company. My methods rely on the assumption that management is reasonably competent. Sold my entire position with a combination of market and limit orders. My loss at 9,000 was a bargain, the stock is up 4.50 on the giveaway, I have received very nearly a full refund of my tuition.
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Comments (1)
Tom,
you're an accountant - numbers,numbers, number.
The Devil is in the details - Reading the Footnotes of an annual report, etc. THE LARGE PRINT GIVES, the small print takes it all back,
Insurance is a Pool of Capital standing behind RISK for Premiuns. No Capital no Insurance business. A POOL of capital needing a $1 Billion infusion was a Fictional Pool ofg Capital indeed - notionally speaking,
It's numbers & people - people can tell lies with numbers. Numbers don't lie but Staticians often do,
Once again we LEARN our LESSONS. The trick is not to Repeat our mistakes & errors, Fool me once Shame on you; fool me Twice Shame on Me.
Don Ferk ( aka VikingWarrior )
Posted by don ferk | December 11, 2007 3:54 AM