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Banking, finance, and taxes

Counter-Take: U.S. Treasury Could Have Sold More AIG Shares

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By Jon C. Ogg Updated Published
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The United States Treasury has successfully unloaded more shares of American International Group, Inc. (NYSE: AIG).  While the last two sales were a bit harder on the stock, AIG shares are managing to hold up extremely well here as AIG is absorbing some of the shares itself.  What is interesting here is that Uncle Sam could have obviously unloaded a lot more stock.

This sale was for 164 million shares and the price went off at $30.50 per share after closing at $31.34 on Friday.  Now shares are up more than 2% at $32.00 and we have already seen 25 million shares trade in the secondary market.  AIG was buying up to $3 billion worth of the stock, which keeps the perceived float and the perceived dilution lower.

This share sale was conducted by a huge group of book-runners: BofA Merrill Lynch; Barclays; Citigroup; Credit Suisse; Deutsche Bank Securities; Goldman Sachs; J.P. Morgan; Macquarie Capital; Morgan Stanley; UBS Investment Bank; and Wells Fargo Securities.

This was also higher of a sale price than the last two share sales from the Treasury.  Any time you see the price of a secondary offering trading higher than the offer price AND higher than when the share sale was first telegraphed, it is almost always a good sign.  The Treasury could have sold more AIG shares.

JON C. OGG

Photo of Jon C. Ogg
About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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