Why MBIA Shares Jumped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of insurance provider MBIA jumped as much as 25% today after it won the dismissal of a long-standing lawsuit from Bank of America .
So what: The Supreme Court of New York upheld an earlier decision that said the company's 2009 restructuring plan was legal, dismissing the allegations from B of A and Societe Generale. The two banks were left over from 18 that had originally sought a reversal of the restructuring approval, accusing MBIA of committing fraud in the process. The suit had weighed on MBIA's shares in the recent past as a favorable result for the plaintiffs would have been damaging for the insurer. CEO Jay Brown said he was "pleased" that the court had affirmed what he believed was obvious all along.
Now what:Today's result represents a big step for MBIA, but it's still facing litigation in other areas. MBIA's principal business is insuring municipal bonds, and the company should improve along with the overall financial sector, which has been among the best performers this year. Today's news should only strengthen the investing thesis for MBIA.
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The article Why MBIA Shares Jumped originally appeared on Fool.com.Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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