Replies to post #330 on Tower Group, Inc. (TWGP)

[Smilin_B]

There hasn't been any "developed series of negative events and bad news" since the shareprice hit it's lows in the $3.50 area.

The chart is REVERSING in the FACE of all the "bad news" that has BEEN out.

The runoff valuation of TWGP alone is $6 - $7/share

The 8 day exponential moving average resides at $4/share

The 20 day exponential moving average resides at $4.13/share

TWGP closed at $4.14/share

We have had several moves above BOTH those key moving averages and today managed to close ABOVE the 20 ema trendline.

We have a gap to fill from $5 to $7/share

Shorts will begin to cover at around $4.50/share and a short squeeze will begin into the mid to high $5 area

[Smilin_B]

From the Form 8k filed today:

Upon filing of the Form 10-Q during the 90-day period beginning on November 19, 2013, the Event of Default will be cured and the Company will only be obligated to pay the Additional Interest for the period from November 19, 2013 to the filing date of the Form 10-Q.

Ever wonder why the price per share increased on such high volume today?

Keep in mind that the company's problems aren't related to cash but rather to capital levels which currently prevent them from writing new business. So currently there are clearly fears of bankruptcy priced into the shares which just won't happen - the run-off scenario is the worst case and offers 50% upside from current levels.

What: Shares of embattled insurer Tower Group International, Ltd. (NASDAQ: TWGP ) spiked 10% this morning after its quarterly results topped Wall Street expectations.

So what: The stock has plummeted over the past several months on growing capital concerns, but a market-topping second quarter -- operating loss of $5.10 per share on revenue of $460.5 million -- suggests that Tower Group's turnaround initiatives are gaining some traction. In fact, management announced that it is reducing its workforce of about 1,400 people by 10%, a move expected to save the company about $21 million in annual costs.

Now what: Management continues to review several strategic options to help deal with its current situation. "To address current liquidity needs at the holding company, we are exploring the sale of some of our holding company and operating assets as well as exploring the possibility of raising additional capital," said President and CEO Michael Lee. "We are working diligently to address these challenges."

"Due to this re-underwriting and rate increases that we are achieving in most of the other segments of our business, we believe our current business that we are underwriting is performing well. After the reserve strengthening and goodwill impairment in the second quarter, Tower Group International, Ltd. shareholders' equity and consolidated statutory surplus at June 30, 2013 were $579 million and $493 million, respectively.”