American International Group's (AIG) - Get Report 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.

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

Taiwan life insurance unit

and its

consumer-finance operations in Russia

.

And on Thursday it was reported that AIG is discussing a possible deal

to sell all or parts of its foreign life-insurance unit American Life Insurance

to

MetLife

(MET) - Get Report

.

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