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

Banking, finance, and taxes

Published: August 6, 2012 11:39 am

Last Updated: April 27, 2020 7:36 pm

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

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