Ambac Shares Find Footing After Plunge

Updated to add closing share price.

(NEW YORK) TheStreet -- Ambac Financial Group (ABK Quote) shares stabilized Wednesday after the stock endured a round of frenzied selling in the previous session as the media and investors alike sought to make sense of significant changes in the language of the company's most recent regulatory filing.

The stock closed at 80 cents, up a penny, although it dipped as low as 64 cents in morning action, a depth unseen since mid-March. Volume of 56.8 million was more than double the issue's three-month daily average of 23 million.

The first major revelation from the Form 10-Q for the third quarter ended Sept. 30 that Ambac filed late Monday was that one of the strategies under consideration by the company to address its liquidity needs was a prepackaged bankruptcy plan. The other was that its main regulator - Wisconsin's Office of the Commissioner of Insurance, or OCI - has increased its oversight of the company's primary operating unit, Ambac Assurance Corp., and is in the process of reviewing the unit's ability to pay all the claims in its insured portfolio.

In the first instance, the reference to a prepackaged bankruptcy plan was a step beyond the usual boilerplate language featured in Securities and Exchange Commission filings about potential calamities that can strike a publicly traded company. It also represented a change from the Form 10-Q for the second quarter, when the company simply said, if various strategies didn't pan out, it "may need to consider seeking bankruptcy protection."