Posted on 09/08/2009 2:38:37 PM PDT by Libloather
Insurer AIG's shares slide on analyst downgrade
1 hour, 35 minutes ago
(AP:NEW YORK) The near-term sale of American International Group Inc.'s assets will leave little value for common equity holders, a Credit Suisse analyst said Tuesday, downgrading the troubled insurance giant and slashing his price target for the stock in half.
Shares slid $3.58, or 8.9 percent, to $36.47 in late trading.
Analyst Thomas Gallagher downgraded his AIG rating to "underperform" from "neutral" and wrote in a research note that the government's plan to be a bridge rather than a permanent stakeholder suggests meaningful asset sales or initial pubic offers need to occur over the next 12 to 18 months.
The company's new CEO, Bob Benmosche, has recently said that a rapid liquidation of businesses isn't the best course of action for either the debt or equity holders. Still, a slow sale of assets over two or three years isn't likely to render upside value, Gallagher said, cutting the target price to $15 from $30.
When the credit crisis hit last year, the U.S. government rescued AIG from the brink of collapse with a loan bailout package worth up to $182.5 billion. The government now owns roughly 80 percent of the huge insurer. AIG is shedding assets and cutting costs as it restructures.
**SNIP**
AIG's shares have traded between $6.60 and $493.60 in the past year. The stock was mostly flat in July, trading below $15 a share, but has surged upward this month, nearly tripling in value.
(Excerpt) Read more at news.ino.com ...
Alright - fess up. Who bought at $493?
aig is a welfare ho so no surprise there
How the hell is AIG trading anywhere above a buck?
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