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Member, Beacon International Group, Ltd.
NEW YORK (Reuters)—Shares in bailed-out insurer AIG fell to their lowest levels in nearly eight months Monday, potentially moving them into loss-making territory for the U.S. Treasury.
The Treasury holds 92.11% of New York-based American International Group Inc. and has a break-even point of about $28.72 per share on the stock.
AIG shares fell 3.4% to $29.67 in afternoon trade. Shares dipped to as low as $29.45 at one point in the morning.
Assuming the government were to sell the stock at a 3% discount to its closing price—as researchers say the Treasury did with its shares in Citigroup—it would lose money on the sale.
In mid-January, the government stood to make a profit of more than $27 billion on its AIG stock, but the shares have lost more than one-third of their value since. Last Thursday, AIG reported a loss of more than $1 billion from continuing operations for the first quarter.
The Treasury and the company are expected to sell billions of dollars in stock this month, as the company demonstrates an ability to raise capital and the government embarks on reducing its stake. AIG has said it expects the government to have sold off its whole position by mid-2012.