For Consideration... Another Gov't AIG Share Sale (AIG)

American International Group Inc. (NYSE: AIG) may be back on track.  After the U.S. sold a stake in the last year, pressure remained from the larger share float and the fears of a share overhang from future sales may have added some extra pressure as well.  That may be changing now.

AIG is up Monday on news that it has commenced a $6 billion sale of shares in the Hong Kong life insurance outfit AIA Group Ltd.  The funds are to help pay back Uncle Sam for the 2008 bailout.  AIG will hold about 19% of AIA after the shares are sold. Perhaps more interesting is another thought: should the government consider another share sale?

With a 2.5% gain to $30.55 so far on Monday, the shares are now back over the price at which the United States Treasury sold 200 million shares in 2011… $29.00.  Uncle Sam is back up where it was before the offering weakened shares of AIG.  If the U.S. wants to unload more shares this time, perhaps it will consider it soon.

Robert Benmosche has said he is feeling better than he was a year ago and he recently signaled that he might be willing to stay on longer than Wall Street and Main Street assumed.  That would be a good thing.  Last quarter’s earnings report was well received and shares have risen about 31% from the $23.20 close at the end of 2011.

If Uncle Sam wants to sell more shares, hopefully it will do this quicker and maybe smaller than the last sale.  AIG lost one-quarter of its value in the two-months before that stake was sold last year.

JON C. OGG