AIG Hits New 52-Week High

AIG shares were climbing sharply on Friday as investors got more comfortable with the company's revised bailout-repayment plan.
By Lauren LaCapra ,

NEW YORK (

TheStreet

) --

American International Group

(AIG) - Get Report

shares again hit a new

52-week high

on Friday, approaching $50 by late-morning, as investors became more comfortable with the company's revised bailout-repayment plan.

In recent trading, AIG was up 3.7% at $49.54. On Thursday, the stock hit a new 52-week high of $48.60 and has ranged from $21.54 to current levels over the past year.

The shares haven't stayed above $50 consistently since late-2007; when adjusting for a reverse 20-for-1 split, the stock hasn't gotten near that level since

a speculative buying frenzy in the summer of 2009.

On Thursday, Fairholme Capital, which is the largest private holder of AIG stock, said in a regulatory filing that it had acquired 2 million additional shares, increasing its stake to 30%. The stock acquisition came on the heels of a revised bailout-repayment agreement between AIG and the federal government.

>>>AIG's Largest Private Investor Raises Stake

As earlier indicated, AIG will repay the

Federal Reserve

using funds from asset sales and repay the U.S. Treasury Department by converting its preferred stock investment into 1.65 billion common shares. But a provision was added to allow AIG to issue up to $3 billion in new common stock as well. When the insurer disclosed those plans on Wednesday afternoon, the stock sold off sharply on dilution concerns and trading was halted.

The stock recovered on Thursday morning, as Fairholme disclosed its bigger stake. In

an interview with

Fortune

published on Friday morning, Fairhome founder

Bruce Berkowitz

reiterated his bullish view on the stock. Berkowitz said he expects the Treasury Department to earn a big profit on its 92% stake in AIG. He attributed the earlier sell-off to a lack of understanding in the market about the bailout-repayment revisions.

"With time, more people will read it and understand it," said Berkowitz. "And I think it's becoming clear now that the government is going to be paid with interest over time, and that some patience will also pay, both for taxpayers and for stockholders."

>>>Berkowitz Dives Deeper Into AIG Stock

>>>Q&A With Berkowitz On AIG Stake

-- Written by Lauren Tara LaCapra in New York

.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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