AIG - common stock tomorrow 17 Sept

Discussion in 'Stocks' started by m22au, Sep 16, 2008.

  1. m22au

    m22au

    or maybe Potash, I'm sure they'd like 79.9% of that company


     
    #11     Sep 16, 2008
  2. rros

    rros

    If I understood your back of the envelope correctly, it meant

    80% - 85 bill
    100% valued at ~106 bill

    Shareholders take at 21.25 bill (/2.69 bill shares > 7.80/share). I don't think he was counting the loan as an asset but as a simple company valuation that stemmed from the PR.

    But wouldn't the price be set ultimately by supply/demand? Given that bk has been averted (it appears) there may be many interested buyers at the opening. Specially if the details of the agreement represent no immediate dilution (giving specific dates for conversion). A different story if warrants can be excercised at 0.001 and/or at anytime. Another difference with FRE and FNM, management stays in place as opposed to conservatorship.
     
    #12     Sep 16, 2008
  3. err alright guys, so what's the bottomline.

    stock open <$1
    stock remains current level ~$2-4
    stock gaps to >$5
     
    #13     Sep 16, 2008
  4. m22au

    m22au

    I agree - price will be set by supply and demand.

    The difference with the AIG bailout, when compared to the FRE/FNM situation, is that the Treasury announcement for FRE/FNM specifically stated that the government received senior preferred stock worth $1 billion.

    No dollar value was given to the 79.9% of AIG that the government received.


    QUOTE]Quote from rros:

    If I understood your back of the envelope correctly, it meant

    80% - 85 bill
    100% valued at ~106 bill

    Shareholders take at 21.25 bill (/2.69 bill shares > 7.80/share). I don't think he was counting the loan as an asset but as a simple company valuation that stemmed from the PR.

    But wouldn't the price be set ultimately by supply/demand? Given that bk has been averted (it appears) there may be many interested buyers at the opening. Specially if the details of the agreement represent no immediate dilution (giving specific dates for conversion). A different story if warrants can be excercised at 0.001 and/or at anytime. Another difference with FRE and FNM, management stays in place as opposed to conservatorship.
    [/QUOTE]
     
    #14     Sep 16, 2008
  5. LEAPup

    LEAPup

    I hear ya. So how many shares are you buying if this is the case, and the open is $1???:p :cool: :D
     
    #15     Sep 16, 2008
  6. I don't understand anyones math here. AIG currently has a market cap of $7 billion and is trading at $2.60. The federal government now owns 79.9% of the company. End result is existing shareholders have been diluted and now only own 1/5th of the company. 1/5th of the shareprice is 52 cents.
     
    #16     Sep 16, 2008
  7. Potash Corp. of Saskatchewan, Inc. (POT) is a Canadian company. The Federal Reserve would have a lot of explaining to do for bailing out a Canadian company.
     
    #17     Sep 16, 2008
  8. was planning to hold some option/stock delta neutral combo into overnight. But ended up daytrading the spread between the straddle and underlying all day long :p

    Currently dont have a position. may play this again tomorrow. nice stock.
     
    #18     Sep 16, 2008
  9. m22au

    m22au

    One fifth of which share price? 4pm? or 8pm?

    It doesn't really matter, because the share price at 4pm and 8pm didn't include the news that was released at 9pm.

    Yes, existing shareholders will now only control 20% of the company, however on the upside AIG now has access to a $85b loan.

    For that reason, I don't think the shares will fall below 75 cents (0.2 * 3.75) tomorrow.


     
    #19     Sep 16, 2008
  10. xbr3

    xbr3

    Need advice from professional traders.
    I bought 5000 AIG shares at $4.45 a during the day.
    Then saw the aftermarket and sold 5000 shares short in a different account at $2.05.
    How would you handle this?
    HELP! Thanks
     
    #20     Sep 16, 2008