How Did AIG Go From Like 1 1/2 to 18 3/4 this Week??

[jjgold]

Did I miss something?

[durito]

AIG shares drop after 1-for-20 reverse-stock split
Associated Press, 07.01.09, 03:02 PM EDT
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BOSTON -- American International Group Inc. shares tumbled Wednesday after shareholders approved a 1-for-20 reverse-stock split to prop up the share price of the insurer as it continues shedding assets and spinning off some subsidiaries in an effort to repay the government and return to profitability.

Wednesday was the second day in a row that the company's shares tumbled. On Tuesday, the stock fell nearly 13 percent after AIG ( AIG - news - people ) disclosed in a regulatory filing that it could face additional losses on credit-default swaps remaining on its books.
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Taking the split into account, shares of AIG fell $4.98, or 21 percent, to $18.22 in Wednesday afternoon trading. Before the split, AIG's shares had closed Tuesday at $1.16 per share.

At AIG's annual meeting on Tuesday, shareholders overwhelmingly approved the New York-based company's proposal to lift the share price by shrinking the number of outstanding shares at a ratio of 1 for 20. When the proxy proposal was disclosed in May, CEO Edward Liddy said a split would protect the company's listing on the New York Stock Exchange.

The U.S. government now has an 80 percent stake in AIG. Its shareholders have nearly been wiped out since the government provided the company with a lifeline in September at the height of the financial crisis. AIG hurt itself by underwriting risky financial derivative contracts, not because of its traditional insurance operations. AIG to date has received a total of $182.5 billion in loans from the government.
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Liddy has told shareholders the government may never give up its stake. "I can give you no assurances that it will ever change," Liddy said responding to a shareholder's question.
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WOW. AIG Reverse Split of 1 for 20 shares is a greater crime than Madoff's scam. I had a thousand Shares of AIG Stock and now I have fifty shares with 95% less earning potential. What a Great inve....
Comment On This Story

Shareholders voted to overhaul the company's board, but they failed to approve a proposal authorizing AIG to increase the number of common shares from 5 billion to more than 9.2 billion.

As of March 31, AIG had about $192.6 billion outstanding of the swaps, which were primarily written for European financial institutions. In a regulatory filing Monday, AIG said that continued declines in the value of the contracts could hurt its financial results.

Credit-default swaps are essentially insurance contracts protecting an investor against default on an underlying investment, such as mortgage-backed securities. Underwriting of the risky contacts were at the heart of AIG's near- collapse last fall when it took an initial $85 billion bailout from the government to remain in business.

Last week, AIG announced plans to spin off two life insurance subsidiaries. The company announced on Tuesday that it was selling the assets of a Taiwan-based subsidiary, AIG Credit Card Company (Taiwan) Ltd., to Far Eastern International Bank. The sale of the credit-card company brings to 17 the total number of asset sales AIG has announced since last fall.

AIG shares traded over $100 earlier in the decade and were near $70 when the financial crisis began in late 2007. Its stock had fallen about 89 percent, however, since the government first bailed the company out.

[capitalist pig]

They did a 20 for 1 reverse split. Give them 18 months, it will be back around $2. The only reverse split that I can think of that actually worked is PALM, JMO.

later

[jjgold]

Thanks guys

Might be a stock to short

[HedgeHog]

Thanks guys

Might be a stock to short

You can't short AIG, moron.