Can someone PLEASE explain to me how the Federal Reserve bought an 80% stake in AIG?

[m22au]

Thanks for that The Kin.

I'm still disgusted that shareholders are not being diluted further.

All it would have required is a couple of additional sentences, such as

"The Federal Reserve will receive (warrants to purchase) senior preferred stock worth $1 billion, representing 80% of the company. The senior preferred stock will rank higher in priority to existing preferred stock and common stock"

Quote from The Kin:

Ivan, here is a very rare gem from the Yahoo message boards

 

[Capablanca]

As I understand it the immediate reason for bankruptcy isn't that they don't have net assets it's that they don't have net current assets. Although I guess without having a clear idea of what their liabilities and potential liabilities are one cannot say for certain how good a chance AIG has of surviving.