Berkowitz still maintains 2.25 (2250000 shares) million shares of MBIA
On May 31, Berkowitz reduced his holdings in MBIA by 92.84%. Berkowitz sold a total of 29,175,720 shares of MBIA at an average price of $14.25 per share, representing a 5.07% impact to his portfolio. Since his sell the price per share of MBIA has dropped 4%. The guru still maintains 2.25 million shares of MBIA, dropping it to one of Berkowitz’s smaller holdings. The shares Berkowitz now owns represent just over 1% of MBIA’s shares outstanding.
Berkowitz bought into MBIA during the second quarter of 2010 at an average price of $7.66 per share. Since that buy, the price per share of the company has jumped 79.4%.
During the first quarter of 2013 Berkowitz decreased his holdings of MBIA by 26.05% by selling a massive total of 11,069,600 shares at an average price of $10.02 per share. Berkowitz ended the first quarter holding on to 31,425,820 shares of MBIA. Prior to his recent selling of MBIA stock, the company was one of the guru’s largest holdings.
Berkowitz’s reduction of MBIA came right as Fairholme took on a $500 million stake in Fannie Mae and Freddie Mac. Berkowitz reported to CNBC in regards to his new position:
The time to restructure Fannie and Freddie is upon us, sustaining our nation’s economic recovery requires it. On behalf of the hundreds of thousands of Fairholme shareholders who helped to rebuild American International Group, Bank of America, CIT Group, General Growth Properties, MBIA and others after the Great Recession – we stand ready to do our part.
Based on the Peter Lynch Valuation of MBIA, the company appears to be undervalued:
My guess is that the Bruce is still selling, probably going to eliminate MBIA entirely. Dell above has recapped his historical ownership which left 2.225M shares at 5-31. On June 3rd, the first trading day following the amended 13G filing, there was a block transaction of approx 650K twenty minutes into the session at around $14.20 (this was Bruce trimming further, IMO. Yesterday and today we have seen the same pattern that was so prevalent in May, stock subject to intermittent intervals of selling, almost always in bursts. But if that was BB on the 3rd then there were only 1.6 million shares left and I would not be surprised if he is now down to inconsequential levels. Look for a nice bump soon as once this pressure is eliminated a more normal supply-demand equation will at hand.