How much worse can AIG get?

readytoretire answered 8 months ago …

AIG's stock has soared the past few trading days. They are now close to triple what they were. However, that stills leaves them under a buck. With the government now owning such a large percentage of them, I don't see much medium term good news. Short term, as they pay out the bad bets that they made, they will continue to drink capital. The insurance portion of them still makes money, it is just dwarfed by the bets that they made and are having to pay off to other banks, hedge funds, everyone. The financial services division made bets like a insurance company on the southern beach without regard to a hurricane, and we are paying to price. If AIG would ever explain what they had in the box, it would make an estimate much easier. If no more companies go under, the bets should close out without payment needed and allow them to show income in this division. That is assuming they didn't make too many on what the weather would be like on Tue. That said, it wouldn't surprise me if the stock made it to $4. I can't see it getting over 10 until the government starts getting rid of its share and at 80%, it can't do that without killing the stock price.