NEW YORK (
) -Shares of
were down sharply Monday following an analysis over the weekend by
arguing the stock is overpriced.
Along with other highly distressed financial names like
, AIG shares have been on a tear, as investors bet that all the negativity is overdone.
noted Friday, the huge trading volumes in
are puzzling, given that the government and insiders like former CEO Maurice "Hank" Greenberg, together own more than 90% of the float.
notes that AIG's $58 billion worth of equity falls to roughly $15 billion, once the U.S. government's more than $42 billion preferred equity stake is taken into account. Shareholders will suffer further dilution as AIG gives the government $25 billion in fresh equity to pay down part of its $44.8 billion in obligations to the
Taking into account AIG's debts to the government and $6.4 billion in goodwill,
eventually concludes AIG has negative tangible common shareholder equity of $7 per share at the end of the second quarter.
AIG shares were down 9.5% to $45.45 in recent premarket trading Monday.
Written by Dan Freed in New York