AIG - common stock tomorrow 17 Sept
- Thread starter m22au
- Start date
If I understood your back of the envelope correctly, it meant
80% - 85 bill
100% valued at ~106 bill
Shareholders take at 21.25 bill (/2.69 bill shares > 7.80/share). I don't think he was counting the loan as an asset but as a simple company valuation that stemmed from the PR.
But wouldn't the price be set ultimately by supply/demand? Given that bk has been averted (it appears) there may be many interested buyers at the opening. Specially if the details of the agreement represent no immediate dilution (giving specific dates for conversion). A different story if warrants can be excercised at 0.001 and/or at anytime. Another difference with FRE and FNM, management stays in place as opposed to conservatorship.
I agree - price will be set by supply and demand.
The difference with the AIG bailout, when compared to the FRE/FNM situation, is that the Treasury announcement for FRE/FNM specifically stated that the government received senior preferred stock worth $1 billion.
No dollar value was given to the 79.9% of AIG that the government received.
QUOTE]Quote from rros:
If I understood your back of the envelope correctly, it meant
80% - 85 bill
100% valued at ~106 bill
Shareholders take at 21.25 bill (/2.69 bill shares > 7.80/share). I don't think he was counting the loan as an asset but as a simple company valuation that stemmed from the PR.
But wouldn't the price be set ultimately by supply/demand? Given that bk has been averted (it appears) there may be many interested buyers at the opening. Specially if the details of the agreement represent no immediate dilution (giving specific dates for conversion). A different story if warrants can be excercised at 0.001 and/or at anytime. Another difference with FRE and FNM, management stays in place as opposed to conservatorship. [/QUOTE]
The difference with the AIG bailout, when compared to the FRE/FNM situation, is that the Treasury announcement for FRE/FNM specifically stated that the government received senior preferred stock worth $1 billion.
No dollar value was given to the 79.9% of AIG that the government received.
QUOTE]Quote from rros:
If I understood your back of the envelope correctly, it meant
80% - 85 bill
100% valued at ~106 bill
Shareholders take at 21.25 bill (/2.69 bill shares > 7.80/share). I don't think he was counting the loan as an asset but as a simple company valuation that stemmed from the PR.
But wouldn't the price be set ultimately by supply/demand? Given that bk has been averted (it appears) there may be many interested buyers at the opening. Specially if the details of the agreement represent no immediate dilution (giving specific dates for conversion). A different story if warrants can be excercised at 0.001 and/or at anytime. Another difference with FRE and FNM, management stays in place as opposed to conservatorship. [/QUOTE]
I don't understand anyones math here. AIG currently has a market cap of $7 billion and is trading at $2.60. The federal government now owns 79.9% of the company. End result is existing shareholders have been diluted and now only own 1/5th of the company. 1/5th of the shareprice is 52 cents.
Potash Corp. of Saskatchewan, Inc. (POT) is a Canadian company. The Federal Reserve would have a lot of explaining to do for bailing out a Canadian company.
Quote from LEAPup:
I hear ya. So how many shares are you buying if this is the case, and the open is $1???
was planning to hold some option/stock delta neutral combo into overnight. But ended up daytrading the spread between the straddle and underlying all day long
Currently dont have a position. may play this again tomorrow. nice stock.
One fifth of which share price? 4pm? or 8pm?
It doesn't really matter, because the share price at 4pm and 8pm didn't include the news that was released at 9pm.
Yes, existing shareholders will now only control 20% of the company, however on the upside AIG now has access to a $85b loan.
For that reason, I don't think the shares will fall below 75 cents (0.2 * 3.75) tomorrow.
It doesn't really matter, because the share price at 4pm and 8pm didn't include the news that was released at 9pm.
Yes, existing shareholders will now only control 20% of the company, however on the upside AIG now has access to a $85b loan.
For that reason, I don't think the shares will fall below 75 cents (0.2 * 3.75) tomorrow.