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The Next Volkswagen
Ladies and Gentlemen, I present to you: AIG
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Wow, AIG is obviously a well run company, good to know the Fed's policies are working.
My thoughts exactly! Give me a piece of that action!
short squeeze on AIG?
can you elaborate on teh VW similarities a bit more... please...
They will end up taking over the US Gov't, instead of vice-versa. The later will have to declare its hedge fund bankrupt.
VW was heavily shorted earlier this year before ramping up suddenly in a few days. I don't remember exactly what the catalyst was but I believe it was a German court order.
Some people believe that GS was a major participant at the time and was forced to cover at insanely high prices. Coincidentally (or not), GS share price fell <$60.
it was an announcement by the Porsche Holding SE that they already own XX% (a large aamount, don't remember the number) of the VW-shares via options.
thanks for the clarification
Porsche had announced that they effectively controlled 75% of VW shares either outright or through options and since the state of lower Saxony owns 20%, it doesn´t take much math to figure out that tradable shares were in short supply. The most massive short squeeze in history, up to now of course, ensued, and VW shot up to over 1000 euro a share and became the most expensive company in the world measured by market cap for a short time. Adolf Merkle, a pretty famous billionaire German businessman, ended up throwing himself in front of a train because of the losses he incurred as a result.
Einhorn got burned on that one too.
Wow, the company whose FP group wrote CDS against everything, was bailed out by the taxpayer in excess of $100 Billion, now trading over $45 a share! How's THAT for justice!
It's easier for it to be $45 dollars since it did a 20 for 1 split. So AIG is back at ~2.20.
this is going to be my retirement fund...i just can't wait to get short this! ;)
the question is: Will they let us short it... or will they ban shorting on it.
its so good to see that Benmosche is doing such a good job from his villa in Dubrovnik.
CB: There should be a retirement rule for revolving door CEO's...Nobody over 60 should be appointed.
bingo; and Benmosche is in serious conflict of interest when it comes to his position as AIG CEO; he has in option to buy another 2.1 million shares of MetLife; and already holds 500 000 shares; That; to me is a conflict of interest.
Agreed and Im wondering who shredded his non-compete contract from MetLife?
Get's appointed, goes right out on vacation, and declares that it doen't matter how much they owe, they will make money. Case in point he's already made 7 million and all he's done is go on vacation. Someone really needs to go to jail...I don't care if it's one of the AIG mailboys, just please send someone to jail.
I've been pounding that all morning.
Seriously, what is driving this thing?
Has to be more than a short squeeze?
Rumors - other than greenberg coming back to "help the company" ?
Pre-split reality - Not that big of a deal.
Who is on the second circuit as FED Ben is appealing like a baby.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aAOhgVw78e3U
I have a bad feeling the fed will get their way...i hope i'm wrong..
Look at the average bid/ask spread, and think about whether they would be wider or more narrow if the computers were shut-off....
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
what the hell is going on with this thing...is there really no news of any sort?
Apparently the new CEO made a comment to Reuters yesterday that he didn't favor a fire sale all their assets and that in a year people would say AIG was performing well.
OBVIOUSLY it's time for a 30% morning rally in the stock.
Makes perfect sense...it's all so rational I don't know how I missed it. So, people really are that stupid.
PS...not surprising they don't want a fire sale...but what about the tax payers that actually own the joint? Did they actually say the really important thing -- that they don't need anymore more money of any kind from anyone?
I assume the comment was made around 3:45 est yesterday.
Benmosche was feeding the algos via the news channels, I guess.
http://www.ravenpack.com/services/index.htm
OK, it has now literally gone off my chart, wow...
In Die Hard 4 (or 5?), Bruce Willis' character will fight off a group of Wall Street bankers who acquire and merge and acquire again in order to make themselves "Too Big to Fail", and then they call the Fed and demand $300 billion of they'll "blow up the entire financial system".
I wonder, though, in the fantasy Hollywood screen version does the Fed pay, or does Willis' hang glide into a Broad Street highrise and pump a full 15 shot clip on his Glock into a Lloyd Blankfein look-alike's bald head?
Can you imagine the audience applause.
I mean come on. Even as a non-finance person I can see the reason behind this. It is trading close to its pre reverse split levels 40-50. People heavily shorted it after reverse split thinking it is easier to short a $30 stock than a $1.5 stock. Any guesses what will happens when lots of shorts pile on it thinking easy money?
Pre-split equivalent pricing was around $23. YTD high was $40. You are right about the extreme fragility of the current price level, is not sustainable.
According to Yahoo Finance, there are 134.57 million shares outstanding. The gov't owns 80%, so that leaves 26.9 million shares in other hands. According to Yahoo Finance there were 21.9 million shares sold short as of July 28, or over 80% of the free float (really more than that when insider holdings are considered). The stock traded 75 million shares this morning in 2 1/2 hours, almost 3X the non-gov't shares outstanding.
It will be interesting to see if we hear of any hedge fund pain in the next few days as there was with Volkswagen.
It's hard to imagine that the AIG CEO didn't have this short squeeze in mind when he asserted that AIG would pay back all its debt to the government and provide some return to shareholders, then followed it up a few days later by saying that he would consult with Hank Greenberg.
The government should insist that this criminal bastard take 100% of his compensation in restricted stock of AIG which cannot be sold until 5 years after he is no longer CEO.
The government's 80% is through preferred shares, not common. That 134mm shares is out there to be churned over and over and over again.
The government's initial investment in AIG was via preferred but that was exchanged for common equity:
http://www.google.com/hostednews/afp/article/ALeqM5h5A4mmDrBYrp2lBaxKOxf...
"Under the new plan, the government will convert its preferred shares -- which are akin to a loan with high dividend payments -- to a form of common stock, which puts the taxpayer funds at more risk if AIG fails.
Robert Brusca at FAO Economics said the new government rescue is "a bid to bolster the battered insurer, but its plan will expose US taxpayers to more financial risk. The new deal, the government's fourth for AIG, represents a nearly complete reversal from the one first laid out in mid-September."
It provides the US government a 77.9 percent stake in the company and reduces the financial burden on AIG from the dividend payments on its preferred shares."
Blood bath..this screams of insider rigging...
Wait for it...wait for it....yes, I saw it! It was definitely there. The price definitely has the capacity to go lower! I just saw it do that, I swear.
then it should
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
Just went long Sept 20 puts. Ticker AI-GUT. Love it.
Short % of Float (as of 28-Jul-09)3: 18.60%
with such data it must be happening.
If the Yahoo figures are true, it had one days' trading vol. ~ 22mil shs on short. And it's already done over 74mil, shouldn't the shorts be covered by now?
AIG is going to pay off the US government. So it should continue to go up. Wonderful fundamentals.
Sep 20 puts? With the govt backing? That $$s gone.
Really......If you want to throw it all away, try shorting C, BAC and GS too.
@old codger,
Delta and Gamma should increase more than enough to offset time decay. Not planning on holding till expiration.
Perhaps AIG has the goods on the Fed? If Bloomberg is successful their bluff gets called.
Omg 'we are long AIG' 100 to 300 usd target.
Vickers(? tbc) on CNBC
Exactly like VW. Short interest was higher than the free
float due to Porsche accumulating quietly a +/-71% position through
derivatives, and the share went from 180 euro to 954 euro
in a matter of days...
I was just about to point this out too. if the SEC wanted to do their job, which they don't, they'd trace the plan for this squeeze back to the reverse stock split, which made AIG margin-able, and part of a grander scheme .
by marginable, I meant 'shortable' (>$5.00) by the average retail trader, who probably did look at the balance sheet and was stomped on for doing so.
I looked at the Yahoo Finance message board for AIG which was in a frenzy as you can imagine. The front page was filled with posts from the last 2 minutes and under. Saw some guy complaining that TD Ameritrade wouldn't let him buy AIG on margin.
Value ? I don't see it.
By the way Vw ended up tumbling back from 954
to now +/- 139 once the dust settled.
Just wait for the official news to come out and the words insider,leak, and front running will be the answers to all of our questions.
The only thing to do now is buy calls now, then puts when it hits 100. Logical thinking will only get you in trouble in bizzarro world.
*must trade it* can't resist the urge. ;-)
93M shares traded.
It would be funny to know how many times the same
share goes around and around and ... you get it.
Official market makers are allowed to do this because when a stock spikes up and they are providing liquidity to
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
buyers.
All right now even Cramer joins in...
short are amateurs blablabla
should have their belts and pants taken away...
errr.... no that would be unacceptable for the children
we can't have that on cnbc.
Another 20 days of 25% rise and AIG's market cap would be $520b. The new CEO would then pay the US government back in kind, about 35% of its shares, and the new CEO retires with a $1b bonus. QED.