Treasury To Sell More AIG Shares

The US government will cut its stake in AIG (NYSE: AIG), again. It plans to take its total piece of the company down to 63%. The cost of the bailout to taxpayers have been calculated to be as high as $180 billion. Many experts expect that amount will never be recouped. However,  Tim Massad, the U.S. Treasury assistant secretary for financial stability, sand  “We remain hopeful that taxpayers will ultimately recover every single dollar invested in the company, which is something few would have expected during the depths of the financial crisis.” At this point, that seems unlikely based on the price of AIG’s stock.

The Federal Reserve and Treasury supported an AIG bailout in 2008 because its huge number of relationships with other financial firms would have caused catastrophic rippled through the credit system. The Treasury will sell the stock at $30.30, about 5% below where it has recently traded. AIG may buy back some of the shares on its own.