A 1 for 20 reverse split took place on AIG shares, effective this morning.
By Daniel at 1 July, 2009, 2:07 pm
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This means you now have 1/20th the number of shares at 20 times the price.
Should be a wash, right?
Unfortunately, a reverse split comes with implications. The company is basically saying our share price is low and it will not be climbing back to its previous levels so we will force a price per share change with the reverse split.
A reverse spilt announcement usually results in a rush for the exits.
Sell or hold? Hard to say. Historically, holding would result in further losses or holding dead money. With all of the additional support these TARP organizations are receiving, it’s hard to say what will happen going forward.
BTW - Thank you for your service to our country!
http://www.marketwatch.com/story/aig-shares-fall-over-20-in-premarket?siteid=yhoof2
BOSTON (MarketWatch) — Shares of American International Group Inc. (AIG 19.72, +18.56, +1,600.00%) were down more than 20% in premarket trading Wednesday after shareholders approved a proposal Tuesday to effect a 1-for-20 reverse stock split. Shareholders defeated a proposal to increase the number of AIG common shares at the company’s annual meeting. AIG, the insurance giant that was bailed out by the government, also saw an overhaul of its board of directors at Tuesday’s meeting.
It seems like AIG is selling everything. This reverse split seems like another amazing vehicle to pull money into AIG. I bet they let the stock drop and if they’ve got a future start repurchasing it when its a penny stock again.. that’s what I’d do. should be fraud!
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