How to Invest in MBIA and Lose $20 Million a Day

The deal hasn’t closed yet so Warburg technicallly hasn’t lost a dime, but it is on the hook for at least $500 million — at $31 a share — and there is no “material-adverse-change” escape clause. The deal is expected to close in January.

...

“I generally think that Warburg Pincus is a very smart private-equity firm, but I don’t think they understand what they just bought,” [Bill Ackman] said. “It’s likely that they’ll lose their entire investment.”