NEW YORK (
) - It hasn't taken much to drive shares of
higher this week.
With no significant news to speak of, AIG stock soared more than 28% to $48.53 late in Thursday's session in a move that appeared to be motivated by a wash of speculative trading and a possible short squeeze. Volume reached 73 million shares; daily average turnover is about 103 million.
The firm's stock price has exploded by more 250% since Aug. 4, a surge that has largely mystified market observers. Last week,
Earlier this morning, reports indicated that the Treasury Department's
Kenneth Feinberg will likely approve the $10.5 million pay package of AIG's new CEO
, Robert Benmosche.
Benmosche is also reportedly reaching out to ex-CEO Maurice "Hank" Greenberg, according to Reuters. This could signal reconciliation between AIG and Greenberg, who was ousted from the company.
Investors hope that if the two are on good terms it could mean Greenberg will be willing to help the new CEO, who has more than enough on his plate, Mike Bellafiore, a trader and partner at SMB Capital said.
Last week, Benmosche showed that he is not in favor of
Investors have also been skeptical of the insurer carelessly selling off pieces of the company in an effort to repay its massive $80 billion loan from the government.
Separately, some of AIG's outside directors asked a federal judge to dismiss a shareholder lawsuit accusing them of falsely overstating the company's financial health, ignoring the potential of losses from credit default swaps and authorizing stock buybacks at inflated prices, according to a filing on Wednesday. Shareholders claim both moves inevitably led to AIG's demise and could have been avoided.
-Reported by Jeanine Poggi in New York.
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.