CNN – AIG stock up 274% in August:
NEW YORK (CNNMoney.com) — Shares of AIG were selling for $49.16 in midday trading on Thursday. At the start of the month, shares were at just $13.14.
What’s going on here?
AIG’s stock has nearly quadrupled in August, but the company is no closer to paying back the $80 billion it owes taxpayers.
AIG was up 27% today alone, closing at $47.84, despite the fact the AIG and other bailout recipients are pleading with Federal courts to not let the public know how much money government had to to give them to keep them from going bankrupt. And despite previous assertions that AIG was in a strong financial position and could pay back the government TARP funds, they haven’t paid back any of the money.
Google Finance AIG chart for August.
LATER: Here’s a distressing take on AIG’s future.
Today’s Wall Street Journal reported that AIG has changed its timetable for selling assets. That was to be expected, because if it sold its assets quickly, shareholders would get nothing, and the government would not get paid in full. It is also AIG’s probable future scenario, albeit the losses may be mitigated.
Benmosche’s own analysis shows AIG “wouldn’t be able to repay the government even if it sold everything.” His strategy is loss mitigation, not a return to AIG’s salad days.
Even the U.S. Treasury, not known for its transparency or candor during this crisis, wrote that its AIG investment is highly speculative.
AIG seems disappointed that its Asia focused life insurance unit, American International Assurance Co. (“AIA”), might only raise more than $5 billion as estimated last spring, especially since AIG valued it at $20-$40 billion in February 2009. AIG is also disappointed with valuations for American Life Insurance Co (“Alico”).
Yet despite AIG being worth less than zero its stock price is soaring. Welcome to Bizarro World.
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