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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