LOS ANGELES (AP) — Shares in American International Group Inc. tumbled on Monday, deepening a slide that's brought the insurer's shares to the lowest point since March 2010 and stoked concerns over whether the U.S. government will be able to make a profit off an upcoming sale of AIG stock.
THE SPARK: The global insurance company, based in New York, has seen shares drop by about half since hitting a high of $61.18 on Jan. 7. The stock price slide comes as AIG and the Treasury Department prepare to sell shares in the company later this month.
THE BIG PICTURE: AIG received a $182 billion bailout from the Treasury Department in 2008 as the U.S. government stepped in to save it from collapse. In March, AIG paid the Treasury Department nearly $7 billion, trimming its outstanding balance to just under $60 billion.
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The Treasury Department still owns about 92 percent of AIG through its holdings of the company's common stock and has said it expects to recover the full bailout amount.
But that goal becomes tougher to accomplish as the value of AIG's shares sinks.
The insurer's recent quarterly results haven't helped bolster the stock, either.
Last week, AIG reported a first-quarter loss of $543 million, after paying preferred dividends, as it booked $2.4 billion in charges related to its repayment of a bank loan more than two years early.
The insurer's property-casualty business also posted $1.7 billion in catastrophe losses from the natural disasters in Japan, New Zealand and Australia.
Still, on Friday, Keefe, Bruyette & Woods analyst Cliff Gallant said in a research note that AIG's shares could go higher.
Assessing AIG's first-quarter results, Gallant said subsidiaries SunAmerica and Chartis showed "good organic premium growth," which generally means growth based on results from existing businesses, rather than acquisitions. And he maintained an "underperform" rating on the stock.
SHARE ACTION: Down $1.01, or 3.3 percent, to $29.69 in afternoon trading Monday.
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