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
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
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.
It seems every other day AIG sheds another layer from its massive portfolio in an effort to repay the $180 billion bailout from the government. Recently, for example, AIG said it would relieve itself of its
And on Thursday it was reported that AIG is discussing a possible deal
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.