Story updated at 10 a.m. to reflect market activity.
Shares of Ambac fell 3.8% to $29.85 in morning trading
The firm set a price target of $21 for the financial group. Ambac's parent company likely won't see much cash flow in the near term according to MKM Partners. That lack of cash flow is the reason for the company's downgrade.
The downgrade comes less than a month after Ambac Financial Group's stock hit an all-time high of $35.61.
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