Financial Stock 10%-Drop Wipes out Previous Day Gains

Posted by on Jul 28, 2010 | No comment

Shares of Ambac Financial Group Inc. (NYSE: ABK) fell 10.61% to $.09 in today’s mid-morning trading, wiping out yesterday’s 17% gain.

The Ambac stock has a 52-week range of $0.51-$3.39. It is currently trading above its 50-day and 200-day moving averages of $0.83 and $0.94, respectively. This indicates that investors are bullish on the stock, currently. The stock saw a steep decline from mid-April onwards. It fell from $2.20 in mid-April to $0.655 in July. However, the stock has seen a rebound in the past one week as it has climbed from $0.655 to the current level.

The Ambac stock has strong support at $0.80. The stock faces resistance at $1.06. Analysts, currently, have a consensus rating of Hold on Ambac. The stock has 1 Hold and 1 Underperform rating, at the moment.

Last week Ambac announced that it completed a sale of its advisory services subsidiary to the company’s management. The transaction was completed on July 16, 2010.

Earlier in the month, Ambac was notified by the New York Stock Exchange that it has fallen below the exchange’s continued listing standard relating to the price of its common stock. As per the rules of the exchange, the average closing price of a listed company’s common stock should be at least $1 per share over a consecutive 30 trading-day period. The company has six months from the day of the notice to have a closing share price and 30 trading-day average share price of at least $1 to avoid delisting.

Ambac announced its first-quarter financial results on May 18, 2010. The company reported a first-quarter net loss of $690.1 million, or $2.39 per share. For the same period last year, the company had reported net loss of $392.2 million, or $1.36 per share.

In the second quarter of 2010, the company announced that it has commuted all of its remaining exposure to CDOs of asset backed securities with counterparties. The company also announced a series of debt for equity transactions in the second quarter of 2010.

Ambac is a New York City-based holding company. Through its subsidiaries, the company offers financial services and financial guarantees to both, public and private sector clients.

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About BeaconEquity.com

BeaconEquity.com is committed to producing the highest-quality insight and analysis of small-cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily OTC stocks in the stock market today, which have traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.

Beacon Equity Group Disclaimer

This newsletter is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Beaconequity.com is a wholly-owned subsidiary of BlueWave Advisors.

While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

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