The government's first share sale of AIG commences tomorrow (Tuesday) night, and that's a good thing. But it's coming at a tricky time.
A good thing, because despite the dilution, it will bring AIG back into (partial) public ownership. The government currently owns about 92 percent of the company.
AIG will be selling 100 million, the government 200 million shares (45 million additional shares may be available for the greenshoe, or overallotment). That's a little more than 15 percent of the company.
Two problems:
1) exposure to all this storm activity, and
2) it's a big week for IPOs and secondaries that could put unexpected pressure on the shares...we have billion dollar offerings from Russian internet firm Yandex (ticker: YNDX) tonight — the so-called "Russian Google" — and Freestyle Semiconductor is also pushing a billion dollar IPO later this week. Tough time to be selling nearly $9 billion in stock.
One other issue: is the government going to make money or lose money? Their break even point is reportedly $28.70...the stock is currently trading at about $30...so it's going to be close.
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