Ambac Financial (AMBC) Soars 17.69% on Regulatory Optimism

Ambac Financial (AMBC) surged 17.69% today, marking its third consecutive day of gains, with a total increase of 22.00% over the past three days. The share price reached its highest level since March 2025, with an intraday gain of 19.32%.

The strategy of buying AMBC shares after they reached a recent high and selling them one week later resulted in a significant underperformance compared to the market. Over the past five years, the strategy yielded a return of -50.40%, while the benchmark return was 58.03%. The strategy had a maximum drawdown of 0.00%, indicating that it did not experience any losses during the holding period, but it also failed to capture any gains, resulting in a CAGR of -24.33% and an excess return of -108.43%.

Ambac Financial's stock price has been significantly influenced by recent regulatory developments and restructuring plans. The Wisconsin Office of the Commissioner of Insurance has scheduled a hearing on the proposed sale of Ambac's legacy business, set for September 3, 2025. This announcement has sparked optimism among investors, who anticipate substantial upside potential from these developments. Ambac's strategic repositioning, which includes the sale of its $420 million legacy business to Oaktree, aims to transform the company into a pure-play property and casualty insurer. However, the Wisconsin OCI has delayed approval of this sale until December 2025, adding a layer of uncertainty to the company's future prospects.