AIG warrant holders smiling


Alongside a rise in the common stock to a multi-year high, AIG's (AIG +0.9%) TARP warrants advance to a new all-time high of $24.03, beating the $24 they traded at on the day of their issuance in January 2011.

The warrants allow their owners the right to buy AIG common at $45 per share up to January 2021.

"Our inclination remains to run from the popular and embrace the hated where prices tend to reflect such mistrust," wrote Bruce Berkowitz in 2011 as the warrants plunged as low as $4.66 each. In addition to its 75.7M stake of AIG common stock, Fairholme is the largest holder of the insurer's warrants with 24.5M as of March 31.

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Comments (10)
  • DeepValueLover
    , contributor
    Comments (10728) | Send Message
     
    What happened to all of those people who were laughing at Berkowitz in 2012?
    27 May 2014, 12:54 PM Reply Like
  • heyo
    , contributor
    Comments (64) | Send Message
     
    who cares?
    27 May 2014, 02:24 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (10728) | Send Message
     
    "who cares?"

     

    I bet all of the naysayers WOULD like to bury the past with a dismissive, "who cares?" but I remember how loud the laughter was around Christmas 2011.

     

    "Bruce has lost it", they said.

     

    "Another hot mutual fund manager flameout", they said.

     

    "He was all hype", they wrote.

     

    Its nice to see a true, hard-core value guy get his vindication but it still leaves me to wonder...

     

    What happened to all of those people who were laughing at Berkowitz in 2012?
    27 May 2014, 02:49 PM Reply Like
  • heyo
    , contributor
    Comments (64) | Send Message
     
    Try to ignore those people, you will be better off...
    27 May 2014, 03:44 PM Reply Like
  • Kamil Kolacek
    , contributor
    Comments (1066) | Send Message
     
    They laughed, but so did Berkowitz, all the way to the bank!
    27 May 2014, 06:02 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (10728) | Send Message
     
    I don't ignore them...I pity them.
    27 May 2014, 08:04 PM Reply Like
  • donm527
    , contributor
    Comments (106) | Send Message
     
    I'm very happy with AIG Warrants with about 100% gain over the 68% gain I've held both over the last two years. I keep thinking whether I should just reduce my common position and move them over to warrants. I think the warrants are still undervalued compared to common.
    27 May 2014, 02:27 PM Reply Like
  • Kamil Kolacek
    , contributor
    Comments (1066) | Send Message
     
    The common is still trading at 3/4 book value so that is not a bad deal either.
    27 May 2014, 06:03 PM Reply Like
  • donm527
    , contributor
    Comments (106) | Send Message
     
    Yeah I figured I can't go wrong holding both and held both for over two years so I'm comfortable keeping as is. Was just thinking of squeezing as much as I could.
    27 May 2014, 06:45 PM Reply Like
  • IWCOTTON
    , contributor
    Comments (61) | Send Message
     
    With plenty of time left before expiration, the warrants are a much better deal if AIG continues to recover. They even adjust for any dividends paid!
    31 May 2014, 11:54 PM Reply Like
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