Earth to Barron’s: Amigo Ackman pwned You

Who is the nut here? Barron's, which months ago tried to present a bullish thesis for MBIA, Inc (MBI-NYSE) by scrutinizing its "runoff value", is taking a potshot at Amigo Ackman in a follow up piece this weekend.

While their call on oil is being roundly mocked in the market today,so is their thesis on MBIA, given the stock is down 10%. And while I do not buy into everything out of Ackman's mouth, Barron's looks foolish as we close out the second quarter, and apparently does not know how to take a loss. Sore losers?

At the end of the first quarter, the company trotted out a new metric, to much derision by the bears, boasting an "analytic adjusted book value" for the company of $10 billion, or $42.15 a share. We attach some credence to this number. As MBIA's CEO pointed out in a recent letter, that number assumes a present value of around $2 billion on future claims losses on its insured portfolio of munis, corporate bonds, mortgage securities and more. Recent trading levels in the stock imply losses of up to $14 billion-bearish to the point of nutty.

MBIA's primary antagonist, hedge fund manager Bill Ackman of Pershing Square Capital Management, claimed last week that MBIA was functionally insolvent, according to Portfolio.com. Earth to Bill: MBIA's insurance unit is still rated double-A, according to S&P, just like stalwarts Met Life (MET-NYSE), Allstate (ALL-NYSE) and AIG (AIG-NYSE). Barron's

With the stock trading at its 52-week lows, Barron's readers have a chance to make a stand behind Jonathan Laing's thesis that the "stock's rally will resume".

Few of them appear to be lining up behind him as we approach the halfway point of trading. In Laing’s defense, he is not completely stubborn, and is bailing on his defense of AIG, throwing in the towel on his February 18th piece entitled: AIG’s Selloff: A Huge Opportunity.

I am not ready to throw in the towel on Barron’s just yet, but I would hope Laing gives Amigo Ackman his due later this year if the stock does not bounce.

“El Guapo”, loosely translated, is Spanish for The Handsome One. While Laing, much like El Guapo, is the Amigo’s adversary, his calls have been downright ugly, and they are rolling right over him.

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Going to Zero? Or Immaculate Entry point for those with faith?

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Follow Up: Time to Bail on AIG
MBIA: Why the Bears are Wrong
Barron’s Subscription required

January 21st
MBIA: Priced for Catastrophe
Barron’s

Einhorn, Ackman and Tilson: Wall Street’s Three Amigos
1440 Wall Street
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The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No Position

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