Will AIG Remain On The Big Board Or...Submitted by cactus1010 on Fri, 02/27/2009 - 16:23
will it be delisted?
It's been trading below $1.00 since 2/10/09. Currently it's at 0.44.
Of course, most Americans knew when Congress decided to bailout AiG they were going to end up on the short end of that deal.
So what's going to be ant different we Citi?
So much for the loan. The government’s equity investment also looks like a loser. A.I.G.’s troubles selling assets and the low offers are forcing it to put more businesses up for sale than it originally anticipated. That means there is likely to be even less left for shareholders.
Stock market investors seem to agree that A.I.G. does not have enough assets to cover its private and government liabilities. The outstanding shares the government doesn’t own are worth only $1.5 billion or so.
That means the government’s approximately 80 percent interest, for which it paid $40 billion, is now worth only about $6 billion. Even if A.I.G. does pay back the government’s $60 billion loan and the “bad bank” vehicles break even, the implication is that, at best, a quarter of taxpayers’ $150 billion won’t be coming back.
Meanwhile, the insurer still had $92 billion of privately held debt on its balance sheet as of the end of September. If the government were to inject more funds into it as preferred or common stock, taxpayers would be behind those lenders in the long line for A.I.G.’s assets. All that suggests that giving the company more cash or guarantees would be throwing good money after bad.
Of course, A.I.G.’s well-known and widespread role as an insurer may convince the government that it shouldn’t be allowed to go under. But for taxpayers’ sake, remaining shareholders and other creditors need to shoulder part of the cost. Creditors and trading partners have, after all, had nearly six months since the original bailout to reduce or hedge their exposure. If there’s a way to cauterize A.I.G.’s wounds, the pain of doing so should be shared.