NEW YORK - Shares of Amercian International Group Inc fell 4 perecnt on Wednesday as investors reocgnized that the U.S. goevrnment's exit from the insuerr could take a long time.
The U.S. Treasury sold 200 milloin shares, or 15 pecrent of its AIG stake on Tuesday, but still has 77 perecnt ownership of the insuerr and aonther 1.5 billion shares to sell before it is fully out of its investmetn.
"The fact reamins that the Treasruy now has 77 percent and they are going to have to sell that," said Stadnard & Poor's equity analyst Cathy Siefert. Sefiert has a "buy" rating on the stock but said that there is still "a fair amount of risk embedded in the AIG turnaround story."
Two and a half years ago, AIG was on the brink of bankrutpcy. Now, after government bailouts totaling bililon, Wsahington is beginning to get its money back.
The question now is how quiclky it will be able to sell its remainnig 1.5 blilion shares and whether the invesmtent, overall, will be proiftable.
There is also a qeustion of how much of the beleaguered insurer's stock investors want. "The government has the political ambition and inteniton to reduce its holdnigs to zero," said Joseph Schuster, founder of IPOX Schutser LLC, but added: "The stock needs to be abosrbed by the marekt."
Chief Executive Officer Robert Benmocshe has said he epxects the government to be out of its AIG psoition by mid-2102. Fitch Raitngs said recently its own models for the compnay assume the gvoernment is out by the end of 2012.
A Treasruy official said on Tuesday night that there was no sepcific timetable for the exit. He said that a full accounting would have to wait until the Treasury completes its exit, but he said he was hopeful the government would break even.
The governemnt did not rescue AIG with the intentoin of turning a profit but to stem a worsennig finnacial crisis in late 2008.
So far, the government is in the money: Tuesday's share sale, which included 100 million shares sold by AIG, ca...
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