While Sirius XM shareholders were buoyed by an analyst's comments, Ambac Financial ( ABK) stockholders found little comfort in an analyst's assertion that their investment was "worthless."

Ambac Financial shares had traded below the $1 mark since December 2009 until the bond insurer reported an unexpected profit after the market closed on April 8. Ambac said it had net income of $558.1 million, or $1.93 a share, in the fourth quarter, compared with a year-ago loss of $2.34 billion, or $8.14 a share. The news was enough to nearly double the share price to $1.10 the following trading day.

The momentum rally persisted into this past week, with Ambac more than doubling to $2.25 during Monday's session on a whopping 415 million shares in volume.

The continued strength in Ambac was attributed to a massive short squeeze. According to the New York Stock Exchange's monthly short interest report, short interest on Ambac Financial increased to 60.4 million shares by the end of March, up from 54.4 million on March 15, making it one of the top 25 short interest candidates on the exchange.

Prior to the better-than-expected fourth-quarter results, it's no surprise Ambac had been a target for short traders. In March, Ambac said it may consider a negotiated restructuring of its debt through a prepackaged bankruptcy proceeding or may seek bankruptcy protection without an agreement with major creditor groups on a reorganization plan. In addition, the Wisconsin Office of the Commissioner of Insurance (OCI), which regulates Ambac Assurance Corp., took control of $35 billion of its main subsidiary's liabilities.

Tuesday looked to be another winning session for Ambac shareholders, as the stock rode momentum higher all the way to $3.39 a share. However, shares pulled back sharply after JPMorgan analyst Andrew Wessel maintained his stance that the common equity "has no value."

"We believe any investment in Ambac shares at this time is highly speculative, although we still believe a short in Ambac equity will generate attractive long-term returns," Wessel wrote. "Basically, we feel the near-term volatility may not be worth the eventual long-term pay-off from a short."

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