Ambac Rocky Balboa oder chapter 11

jajajaj..:)

By Matt Phillips
All the excitement surrounding Ambac — volume is actually outpacing the Citigroup, which is almost always atop the most-active list — offers us an opportunity to actually go back and see who made bets on a stock that has pretty much been a train wreck for the last few years.

We already told you about the crew over at OZ Management, who may stand to pocket a nice bit of scratch on the recent run-up in Ambac shares. Sure, everybody loves spotlighting a great call on a stock. What could be better, right?

How about spotlighting a terrible call! Yes, perhaps nothing is so satisfying as seeing a Wall Streeter get something absolutely, completely, gobsmackingly incorrect. And unfortunately, the folks over at Third Avenue Management fall under that category when it comes to shares of Ambac.

Of course, it didn’t start out that way. It started out — as so many things do — with a glimmer of opportunity. It was late 2007. Amid signs of the developing credit crisis, Ambac shares plummeted from the low $70s in late September to under $30 as investors worried about the insurance the firm was on the hook for related to subprime securities.

Third Avenue — founded by famed value investor Martin Whitman — swooped in during the fourth quarter of 2007, adding some 2.2 million shares of the company. By Dec. 31, Third Avenue owned some 2.7 million Ambac shares, in a stake it valued at $69.6 million.  For a while, it looked like things had stabilized at Ambac. Then during the first quarter of 2008, Ambac again nosedived, falling 77%, from about $25 to under $6. Third Avenue stood its ground on the bets it was making on bond insures, Reuters reported on March 3, 2008:

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