AIG was trading at $2.60 for the sole reason that their was a *HUGE* possibility that the company would be bankrupt within the next *24 HOURS*. This giant risk has essentially been eliminated.
Just a few months ago (while we were still in the middle of the credit crisis), AIG was around 50 dollars per share. Who is to say that the dilution of 80% is not figured from that share price? We don't really know, but that would put us at around $10/share.
Now, that is a simplistic [optimistic] assumption, because we don't have the details about the warrants yet. But, I do know one thing: the higher the share price, the more valuable those warrants are. And I do believe that the Fed has no interest in owning/running a company like AIG. It seems that later down the line, they will convert their warrants and sell them off for a handsome profit.
Meanwhile, I'm keeping my fingers crossed to fetch 7-10 dollars for the shares I have at an avg of around $3.50. Call me crazy, but I think it may be possible. And I don't know if it will be 1 week or 2 years, but the limit orders are in place
EDIT:
I also want to point out that we should keep in mind that this is a short term (albeit large) liquidity problem. A very informative video can be seen here:
http://www.truveo.com/Retired-AIG-Chairman-Speaks/id/1995071003
The former Chairman Hank Greenberg reiterates that AIG is a healthy company from a financial standpoint, it just needs to buy time. The government has provided the liquidity and the time, but unfortunately it came at a price of an 80% stake.
--Relleum
I think the common share is pretty much wiped out no? <$1.