MBIA shares up after regulatory filing from fund manager Bruce Berkowitz reveals big stake

MBIA surges as top fund manager reveals big stake

NEW YORK — Shares of MBIA Inc. soared Tuesday after a top fund manager disclosed a big stake in the bond insurer.

THE SPARK: Bruce R. Berkowitz, the founder of Fairholme Capital Management and manager of Fairholme Funds, said in a regulatory filing that he owns 11.1 percent of the company.

Berkowitz owns about 22.7 million shares, according to the filing submitted late Monday to the Securities and Exchange Commission. In January, Morningstar named Berkowitz the domestic fund manager of the year.

THE BIG PICTURE: MBIA was a high-flying stock during the housing bubble, topping $76 a share in January 2007. But as the market collapsed, so did the bond insurer, as it lost billions covering the risky securities linked to the subprime mortgage market.

The Armonk, N.Y., insurer turned a profit last year, but the stock has continued to struggle.

SHARE ACTION: Up 66 cents, or 10.3 percent, to $7.09 in morning trading. Shares have traded between $3.19 and $10.92 in the past 52 weeks.