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Joe Eifrid

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  • A Second Look at the AIG Deal [View article]
    I was curious about Citigroup and how many shares the govt received. The govt had 7.7 bil shares at 3.25. Average daily volume recently is 425 million shares a day. If we did sell ratio based on avg daily volume that would be 18.1 days of supply.

    On the other hand, the govt is getting 1.66 billion share of AIG at about 29.50. Average daily volume is 4 million or about 415 days of supply

    The govt is still trying to unload C shares and not disrupt the market after more than one and a half years. Obviously with hundreds of millions of shares trading daily in C the market will more easily absorb the C shares.

    The govt says they will sell the AIG shares over the next 1.5 to 2 years?? I think it is an easy bet to say it will; take longer (much longer) and for the govt to say they can they are down right lying, or just plain stupid...probably a of little both. But, I am sure that doesn't surprise anyone. lol!
    Joe Eifrid
    Oct 4 08:28 AM | Likes Like |Link to Comment
  • AIG Pays the Government Back ... With Its Own Money ... Again ... [View article]
    Excerpts from news item; [quote]AIG - The exit plan converts the government’s preferred stock into 1.66 billion common shares for sale on the open market...
    For Treasury to break even on its $49.1 billion investment in AIG stock, the shares must be sold for almost $30.
    When to Sell?
    The U.S. sales will happen in phases over 18 months to two years starting in 2011, said a person with direct knowledge of the Treasury plan. The length of the sale period was meant to avoid flooding the market with AIG shares, said the person, who declined to be identified because details of the strategy are confidential. [/quote]
    There are about 250 trading days each year. Over 2 years that's 500 trading days. The average trading volume for AIG over the last 3 months is about 4 million shares a day. The govt has 1.66 billion shares to sell. That is 3.32 million shares every single trading day for two years. How does this not weigh on prices much longer than 2 years?
    Oct 1 08:42 AM | 2 Likes Like |Link to Comment
  • AIG: Speaking of Being Duped [View article]
    [quote]AIG - The exit plan converts the government’s preferred stock into 1.66 billion common shares for sale on the open market...
    For Treasury to break even on its $49.1 billion investment in AIG stock, the shares must be sold for almost $30.

    When to Sell?

    The U.S. sales will happen in phases over 18 months to two years starting in 2011, said a person with direct knowledge of the Treasury plan. The length of the sale period was meant to avoid flooding the market with AIG shares, said the person, who declined to be identified because details of the strategy are confidential. [/quote]

    There are about 250 trading days each year. Over 2 years that's 500 trading days. The average trading volume for AIG over the last 3 months is about 4 million shares a day. The govt has 1.66 billion shares to sell. That is 3.32 million shares every single trading day for two years. How is that not going to weigh on the share price??
    Oct 1 08:21 AM | 1 Like Like |Link to Comment
  • Is AIG a Buy Following the Government Bailout? [View article]
    Why buy the common anyways when you can buy AIG exchanged traded debt shares that are currently yielding up 55%. Symbols AVF and AFF.?? The gov has pretty much guaranteed debt payments for two years.

    Also, keep in mind that AIG may not need to borrow on the $85 billion line of credit anyways. AIG's problem has not been cash flow. The rating agencies downgraded them only because of their inability to raise more capital if needed to shore up collateral due marking to market of some of their debt. The warrants for 79% of the company are only good if AIG fails to payback anything they drew off the $85 bil line of credit. Again, that could very well be nothing. I think AIG is steal here at just over $2. But, like is I said, a lot less risk buying AVF or AFF as you get paid to wait to see what happens.
    Joe Eifrid
    Sep 17 09:31 PM | Likes Like |Link to Comment
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