AIG - American Intl Group (NYSE Stock)

[Skydaemon]

10 day chart

AIG blew earnings to the downside, doing share capital raise, should drop hard in the AM, down nearly $4 in after hours. Might take the dow too as it's a component.

Ratings cut by fitch and S&P and on some other negative watch lists.

Figured I'd put up a thread for the morning.

[BadThad]

Down pretty big, could be a bounce play once the bottom is found.

AIG on Google Finanace

Chart

Current Price: $39.06

[BadThad]

Article from yesterday:

SAN FRANCISCO (Dow Jones) -- American International Group could report "huge" gains from the second quarter because of a rally in credit markets since the end of March, Bijan Moazami, an analyst at Friedman, Billings, Ramsey, wrote in a note to investors on Friday.

AIG (AIG) reported a record $7.8 billion first-quarter net loss late Thursday. A lot of that was driven by a $9.11 billion write-down on a large credit derivatives portfolio that's exposed to complex mortgage-related securities known as collateralized debt obligations (CDOs).

However, some parts of the credit market have rallied since the end of March, suggesting some of those write-downs could be reversed when AIG reports results from the second quarter, Moazami explained.

"A significant chunk of the first-quarter losses have since reversed in the second quarter as fixed-income securities have rallied recently and the cost of credit default swaps has fallen," the analyst wrote. AIG "could have huge gains in the second quarter."

AIG also said late Thursday that it plans to raise $12.5 billion in new capital. The insurer is selling new common stock and equity units for $7.5 billion of that.

The other $5 billion may come from the sale of hybrid securities. But FBR's Moazami said AIG may end up not bothering because of second-quarter gains.

The analyst kept his outperform rating on AIG shares.

[Ciao]

for info... taken from Briefing.com

AIG Airplane-Leasing Unit Mulling Split

Just last week insurance behemoth and Dow Jones component American International Group (AIG 40.28) announced a first quarter loss of nearly $8 billion after incurring a $9 billion pretax charge. In turn, the firm announced plans to raise roughly $12.5 billion in new capital to restore its financial position.

Now the company is considering splitting off its airplane leasing business, according to this morning's edition of The Wall Street Journal. After AIG announced its first quarter results, the company's credit rating was downgraded, which carries considerable implications for achieving favorable business terms and achieving profitable results in its leasing unit. Moreover, with write-downs and losses continuing to weigh on the financial sector, firms are being forced to re-examine operations, divesting those they find less strategic.

Now AIG is faced with a difficult decision. If it divests its leasing unit, the firm receives a windfall of cash, helping it bandage its wounds. However, doing so would also mean letting go of a profitable business.
ET AIG Airplane-Leasing Unit Mulling Split (AIG) : AIG is considering splitting off its airplane-leasing unit in an effort to avoid further troubles.

[Skydaemon]

Now AIG is faced with a difficult decision. If it divests its leasing unit, the firm receives a windfall of cash, helping it bandage its wounds. However, doing so would also mean letting go of a profitable business.
ET AIG Airplane-Leasing Unit Mulling Split (AIG) : AIG is considering splitting off its airplane-leasing unit in an effort to avoid further troubles.

To which I say, "Airplanes are paste. What's to think about? Dump that junk."

[Ciao]

if any of you are interested.....
AIG Posts $7.8 Billion Loss
Last Update: 09-May-08 08:11 ET

The credit and housing market turmoil continues to take a toll on American International Group (AIG 44.15). The insurance giant reported its second straight quarterly loss, announced plans to raise capital and had its credit rating cut at two agencies.

http://www.briefing.com/GeneralConte...29HeadlineHits

In a questionable move, the company is going to raise its dividend by 10% to $0.22 per share -- even though its capital raise will be dilutive to existing shareholders. The increased cost of the dividend at $50 million per quarter, however, is small in comparison to the capital raise. This marks 23 straight years that AIG has raised its dividend.

Shares of AIG are down nearly 8% in premarket trading, and are down 44% from their 52-week high.

how can they raise the div (?) when they are at high risk?
is that to attrach (hoping) some more investors....
it is not one that I trade or follow..... DYODD

[BadThad]

Thanks Ciao.....quite interesting. I'm not in this position, I just wanted to toss it out there for discussion.

[Aufan 1983]

The nations largest insurer seems to be about to meet an ugly end or are they.

Some are saying this company will file BK as soon as tomorrow while other will say AIG is too big to fail. This company is a monster and if allowed to fail it will affect almost every bank or financial institution.

I shorted this a few times in the 11.00 - 15.00 range and covered @ 7.00 yesterday monrning only to see it fall down into the 3's later. Today its in the upper 2's and low 3's and I'm have just taken a small long position @ 3.00 and will buy a few more if it drops to the 2.00 - 2.50 range

The odds are better this will fall but I can't imagine the fed letting this go. It could be a near fatal blow to our entire financial system

[Aufan 1983]

Originally Posted by Aufan 1983

The nations largest insurer seems to be about to meet an ugly end or are they.

Some are saying this company will file BK as soon as tomorrow while other will say AIG is too big to fail. This company is a monster and if allowed to fail it will affect almost every bank or financial institution.

I shorted this a few times in the 11.00 - 15.00 range and covered @ 7.00 yesterday monrning only to see it fall down into the 3's later. Today its in the upper 2's and low 3's and I'm have just taken a small long position @ 3.00 and will buy a few more if it drops to the 2.00 - 2.50 range

The odds are better this will fall but I can't imagine the fed letting this go. It could be a near fatal blow to our entire financial system

Doubled down at 2.32....... still only have 500 but thats plenty. Too risky.

[Weirdharold]

RISKY is right!