AIG closed barely above $30 today, and 300 million shares won't be easy to place, not with current financials. Daytrading fools kept AIG too high for too long. Institutions are balking at anything above $27, and that means a loss for Treasury, who now threatens to postpone the offering.
Source - NYT Dealbook
The Obama administration has said the $130 billion bailout of American International Group could one day produce a profit for taxpayers.
But that could take a while, if it happens at all. On Wednesday, A.I.G. unveiled plans for a stock offering that was much smaller than once expected.
The offering, which will include the sale of 200 million shares by the government and another 100 million shares by A.I.G., would reduce the government’s stake in the insurance giant to 77 percent from 92 percent.
The government spent $47.5 billion buying up more than 1.6 billion common shares from A.I.G. to save the company from collapsing. For the Treasury Department to recoup that investment, A.I.G. must sell the 1.6 billion shares at roughly $29 a share — and that is hardly a guarantee. Still, A.I.G.’s shares did close at $30.65 on Wednesday, up $1.03 for the day.