Shareholders will be fighting hostile bids soon, this is a joke. It has been bailed out with the fed eating all the trash. The rest of the business is more than sound, it is world leader. I'm not saying go long financials, I'm saying this is one that will be considered a huge miss. Just my my opinion
I agree. They are no where near the same postion as the investment banks. Lots of value in this one, they just need some time.
disagree, the only way the gov't can own 80% is for a share dilution, so the existing shareholders will be wiped out, also to pay for the loan interest, before that u can be sure they will pumped the price as high as they can get u for
AIG Holders Push to Pay Off Loan By LIAM PLEVEN Article Comments more in Business »Email Printer Friendly Share: Yahoo Buzz MySpace Digg Text Size Major shareholders are pursuing an effort to try to help pay off the federal government's loan to American International Group Inc. in time to avoid having Washington take an 80% stake in the company, according to a person familiar with the matter. Hurdles to these shareholders' efforts could be high, as they and other investors they may attract would have to put up significant sums. This week, the government agreed to lend AIG up to $85 billion to help it avoid possible bankruptcy, in exchange for a right to take a controlling stake in the giant insurance conglomerate. The shareholder effort is aimed at trying to make sure the government gets paid back quickly, so that it won't need to take the stake, the person said. That goal could be accomplished not only through asset sales that the company is planning but also possibly through investments in AIG from large investors, such as sovereign wealth funds. The approach could be more beneficial to existing shareholders than the government deal, because it would inject capital in exchange for the equity. In the government arrangement, the government would get equity in exchange for a loan. Edward Liddy, named AIG's CEO this week as part of the arrangement with the government, said he had no knowledge of the shareholder effort and had no comment. AIG shareholders have suffered severely thanks largely to losses linked to the mortgage market. The stock has fallen more than 90 percent this year. The government's acquisition is subject to shareholder approval, as AIG noted Thursday in a filing with the Securities & Exchange Commission. The filing did not disclose when a vote might take place. On Friday, the stock was up with the broader market. Midday it was trading at $3.32 a share, up 23%. Write to Liam Pleven at liam.pleven@wsj.com
If the $700bil will be used to buy bad debt from these companies, then the risk has been shifted from AIG to the FED and tax payers right ? Also, the $79bil is a loan that is collaterized by warrants that allows the FED to buy up to 80% of AID within 2yrs. Not sure of the agreed upon price per share.......but based on the news from the shareholders and the CEO...this seems like something that both parties may prevent from happening ....possibly funds from a private. Someone please correct my thinking if this is wrong.
Seems like a safe buy for a financial, if their business stays the same and taxpayers take all the bad debt then AIG is left with a sweet little loan to repay and they are back in business.
You're dreaming. better read this weekends barrons. aig's stock is basically worthless. the gov't owns 80% period plus the loan must be paid off with huge asset sales. my brothers huge company along with 100's of others will not longer offer aig products. millions will drop there coverage and nobody will deal with them. there business going forward will be 1/5 the size it was. move on its game over
Well that changes everything. Maybe instead of spending the next stimulus check at Walmart, we can get a discount coupon for AIG insurance.