XL Capital Ltd. shares soared more than 70 percent by lunchtime today — even after the company announced it had lost an estimated $1.6 billion in the three months from July through September.

Separately, the company said that its chairman Brian O'Hara sold 80 percent of his shares in the company involuntarily last Thursday to meet a margin call.

"I had pledged those shares as collateral to secure a personal loan used to fund purchases of XL shares in order to avoid the expiration of certain options," Mr. O'Hara said in a written statement. "The forced sale was due to the precipitous drop in XL's share price last week. The sale in no way reflects a lack of confidence in XL's current and future prospects."

The company released preliminary third-quarter results this morning, which showed it had suffered the worst quarterly loss in its history.

A $1.4 billion charge relating to the elimination of exposure to troubled bond insurer Syncora (formerly known as Security Capital Assurance) and around $223 million in losses associated with hurricanes Ike and Gustav were the main reasons for the loss.

In a conference call this morning, chief executive officer Michael McGavick said that rumours which exaggerated the decline in the value of the company's investment portfolio — losses estimated by the company to be between $1 billion and $1.2 billion for the third quarter — had driven last week's sell-off, which saw XL shares lose 80 percent of their value in the space of two days, and close at $4.01 on Thursday.

By 2.02 p.m. Bermuda time today, XL was trading at $12.41, a rise of 67 percent on its Monday closing price.

Read the full story in tomorrow's Business section in The Royal Gazette.