Most Active Stories
- CFCC's Humanities and Fine Arts Center Partnering with DPAC, Carolina Theatre, and Local Arts Venues
- Wilmington Family YMCA Changes Background Check Policy for Volunteers After Gallagher's Arrest
- Cape Fear Chordsmen are Going to the Dawgs
- NC Legislature Considers Foster Care Family Act
- BOEM says Shrinking Buffer Zone for Offshore Oil and Gas Not Possible
Mon September 10, 2012
AIG Stocks Drop, After U.S. Announces Sell-Off Plans
Over the weekend, the United States Treasury said it has plans to sell $18 billion worth of American International Group stocks. During the financial crisis in 2008, the government pumped $182 billion into AIG stock to keep it from collapsing.
Reuters reports, this morning, that AIG shares fell 1.5 percent because of the news. Reuters adds:
"AIG itself will buy back $5 billion of its own shares in the upcoming stock sale, with the rest of the shares going to the broader public.
"AIG will use $3 billion worth of cash and short-term securities, and $2 billion in proceeds from the sale of its stake in Asian life insurer AIA Group to buy back stock from the government, the company said in a securities filing on Monday.
"The Treasury Department announced its plans on Sunday and AIG shares were lower on Monday in late morning trade, down 51 cents at $33.48. Investors had widely expected the Treasury to cash out of its AIG shares, but many investors had expected the sales to happen over a longer period of time."
Right now, it is believed that the government must receive more than $28.73 per share to break even on the bailout.
The New York Times reports that this sell-off by the government is a "a big step in unwinding one of the most controversial bailouts of the financial crisis." However, the Times reminds us, there is still a lot of bailout money in private companies.
"The Obama administration still owns about 32 percent of General Motors, down from an initial 60.8 percent," the Times reports. "And thus far, the Treasury Department has recovered about 50 percent of its initial investment in the auto maker.
During the daily press briefing White House Press Secretary Jay Carney said that the Obama administration was trying to unload these investments as quickly as it could be done practically.
"What it does demonstrate is an ongoing commitment to recover taxpayer money," Carney said according to Reuters. "It's safe to say the president is pleased with the progress being made as we wind down these investments."