AIG Shares Tumble After Stock Split

The nation's investors slammed American International Group ( AIG) after a stock split the company's investors overwhelmingly approved.

Shares of the insurer tanked 21% to $18.22 in afternoon trading, a day after shareholders approved a 1-for-20 reverse stock split to boost share price.

Before the split, AIG's shares closed Tuesday at $1.16 a share.

At AIG's annual meeting on Tuesday, shareholders approved the company's proposal to lift the share price by shrinking the number of outstanding shares at a ratio of 1 for 20. Thus, investors who held 1,000 shares of AIG will now own 50.

When the proxy proposal was disclosed in May, CEO Edward Liddy said a split would protect the company's listing on the New York Stock Exchange.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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