“The current shareholders just lost 80% of their stake. Not exactly a happy scenario for them.”
Yes, but with a $85,000,000 infusion, the stock will go back up, right? So haven’t we bailed them out as well? I always suffered the loss of my bad investments, so should they.
I know naughts mean naught these days, but the number is $85,000,000,000, with nine naughts, not six.
“Yes, but with a $85,000,000 infusion, the stock will go back up, right? So haven’t we bailed them out as well? I always suffered the loss of my bad investments, so should they.”
I guess the answer will be in the details. The release I read said they would buy 80% for a loan. The loan would have to be repaid but the 80% is still the taxpayers. Not sure until we see more but the shareholders are out 80% even if the stock gets back to $70 per share.
$4 or $5 per share is a projected price according to another site. We'll see tomorrow how close that is.
No, the $85 billion loan doesn’t prop up AIGs stock. The $85 billion goes right out the door to pay off the massive losses from MBS deriviatives. Wait until we hear they need another $85 billion and then another. Who knows how large the derivatives losses will grow? That is the problem — no transparency and no knowing who has how much of the toxic paper. AIG may not survive this even with Fed help.