All of a sudden, good news is flooding the sector, despite poor fundamentals.
Today, MBI is cutting the heads off of short sellers, on a funding agreement.
Co announces it has entered into a definitive agreement with Warburg Pincus, which will commit to invest up to $1 bln in MBI through a direct purchase of MBI common stock and a backstop for a shareholder rights offering. The co said the investment will, among other things, increase MBIA’s already substantial capital and claims-paying resources and enable MBIA to grow its business profitably at a time when market conditions present it with attractive opportunities. Under the agreement, Warburg Pincus will make an initial investment of $500 mln in MBI through the acquisition of 16.1 mln shares of MBIA common stock at a price of $31.00/share.
As a result of this financing, SCA, ABK, MTG, PMI, RDN, CFC, NFI, ETFC, WM and a variety of homebuilders are shooting higher.
Again, my favorite, for a trade, is ACF.
Unlike houses, the bastards from ACF can send a fleet of tow trucks out to “collect” collateral.If you enjoy the content at iBankCoin, please follow us on Twitter