Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of bond insurer Ambac (NYSE: ABK) crashed today as the stock succumbed to the company's Chapter 11 bankruptcy filing.

So what: An Ambac bankruptcy filing has been on the radar for some time now, but the company had still clung to the hope that it could find a way to raise money and avoid such a filing. But financing just wasn't there, and Ambac couldn't get bondholders to agree to a prepackaged bankruptcy. Yesterday, the company sought protection in the cold embrace of Chapter 11.  

Now what: In its reorganization, Ambac will wrangle with the IRS over a $700 million tax refund, and seek to preserve $7 billion in net operating losses that it could use to offset future taxes. For equity investors, though, it's over. The stock may bounce around a bit on rumors of shareholder salvation, but investors' best bet is to run, not walk, away from Ambac shares. Meanwhile, there probably aren't too many tears today at rivals MBIA (NYSE: MBI) and Assured Guaranty (NYSE: AGO); Ambac's lack of a prepackaged agreement and the clash with the IRS will severely hamper the company's ability to get back on its feet quickly.

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Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool’s disclosure policy assures you no Wookiees were harmed in the making of this article.