AIG has 24 Billion left

**Maismom** · 10-07-2008, 07:22 AM

I read in Japanese newspaper that AIG's subsidiaries (life insurance business) will be for sale in two weeks. And many companies are already interested. They are expecting $1 to 2 billion proceeds from one of these companies.

So, we will see.

**Broken Arrow** · 10-07-2008, 08:17 AM

AIG's Japanese unit has been one of the most lucrative assets on AIG's balance sheet. Its sale should bring in much needed money, but it's always a shame to have to sell assets, especially when it's lucrative.

And that brings up an interesting debate regarding AIG (that's being waged elsewhere). What, exactly, is AIG's valuation? Certainly it would have to be AIG's remaining assets and businesses once the rest have been sold. But what is that? I hear the list of assets being put on sale have recently been released, but I haven't looked at it.

Personally, because they're having to sell assets that are profitable, and even if they do have a government loan, it means that they are going to be reducing their revenue stream in the near future which translates to a further weakening as they have to struggle harder to pay off that loan with 11% interesting.

I would have preferred that they advance further along in their sales and see what happens before I buy in. After that though, AIG will survive, and then, I THINK, we will see the company's fundamental upsides kick in.

However, I'm not above making a buy earlier than that. I'm actually not above getting into most anything so long as I can see an (shorter term) upside. With AIG, I just don't know what that is right now.

**tripods68** · 10-07-2008, 09:37 AM

Ultimately, AIG stock price is worth more than $3.78 if they keep their core lines and most profitable businesses. I was reading some analysts takes the breakup value of AIG somewhere $20 to $30 range. Whether we reach that in a month or two years it remains to be seen. The overall economic conditions will dictate that or ultimately fails. If and when complete the sale and pay back the $85B loans, they are certainly continue to exist IMO albeit a smaller player in the Insurance industry than before.

**Broken Arrow** · 10-07-2008, 10:00 AM

I don't know. I think $20 to $30 is way too optimistic in my personal opinion. Perhaps it could reach that in a couple of years, but it wouldn't be anytime soon. For comparison, S&P's analyst report puts the current 12 month target price at $5.50.

**tripods68** · 10-07-2008, 10:07 AM

BA

That could very well be. But at $5.50 per share still gives me a 72% profit.
I still take it

**sweeps** · 10-07-2008, 10:15 AM

I saw on CNBC earlier that Greenberg changed the executive bonus plan to not include unrealized losses. So while the company was losing billions, he and the other execs helped themselves to big bonuses.

Greenberg wasn't feeling well today so he couldn't testify before Congress. Heh.

**Broken Arrow** · 10-07-2008, 10:15 AM

Woah, so you bought in at less than $4? Hey, I'll take 72% too!

AIG has 24 Billion left