AIG's Equity Dangerously Close to Zero

American International Group's(AIG Quote) equity could be nearing zero -- or so says a Citigroup analyst.

The news sent shares of the flailing insurer plunging 22% to $10.26 in afternoon trading. Shares of the company have been on a downward spiral after shareholders approved a 1-for-20 reverse stock split last week. AIG closed at $1.16 that day, which is equivalent to $23.20 assuming the reverse split.

In a note, analyst Joshua Shanker said the risk of more credit default swap losses and management's eagerness to shed assets and discounted prices jeopardizes AIG's equity position.

As a result, Shanker cut his price target on the stock to $14 from the split-adjusted target of $36. He maintained his hold rating. ...