nkp007 Posted May 7, 2012 Share Posted May 7, 2012 Interesting note on the Treasury coaxing demand out of institutional shareholders waiting for $29 again.... http://www.forbes.com/sites/steveschaefer/2012/05/07/treasury-sells-5b-of-aig-shares-at-30-50-raises-price-floor-for-remaining-stake/ Most important nugget: "For Stirling, a key takeaway from the latest sale is that Treasury and AIG are coordinating their efforts, and that the Federal Reserve appears to be comfortable enough with the firm’s capital levels to allow for the hefty buybacks. Of even more importance is the price level at which the government sold shares." Link to comment Share on other sites More sharing options...
ERICOPOLY Posted May 7, 2012 Share Posted May 7, 2012 Back in at $31.12 this morning. Perhaps as the Govt stake gets smaller the buyers will grow more confident and the last sales will be much larger. Right now, people feel there is no rush because there are perhaps another 6 sales of this size yet to go. But if they price the last $15 billion or so in a single offering, it will only be blue sky on the other side of it so it might sell briskly and at a higher offering price. Link to comment Share on other sites More sharing options...
racemize Posted May 7, 2012 Share Posted May 7, 2012 we need more AIG asset sales to go through so it can buy back 15-20 billion more from the Treasury (hopefully at the 30 dollar range, but I bet it goes up every time, depending on the market). Link to comment Share on other sites More sharing options...
Uccmal Posted May 7, 2012 Share Posted May 7, 2012 we need more AIG asset sales to go through so it can buy back 15-20 billion more from the Treasury (hopefully at the 30 dollar range, but I bet it goes up every time, depending on the market). Seems the case. For existing shareholders it's tails I win, heads I win. Link to comment Share on other sites More sharing options...
PlanMaestro Posted May 7, 2012 Author Share Posted May 7, 2012 http://www.aigcorporate.com/investors/BOFAMerrillLynch_InvestorPresentation.pdf Page 6 YE 2010 RBC Ratios: Chartis 395% SunAmerica 499% Link to comment Share on other sites More sharing options...
sswan11 Posted May 7, 2012 Share Posted May 7, 2012 from Yahoo AIG message board: j0n_48195 Re: How many more sales for AIG to be %50 owner 7-May-12 12:17 pm The significance of this November is obvious. The feds are willing to sell at a discount (meager profit to cost) until then. That has suppressed the price for the past year and puts pressure on AIG to generate as much cash as possible to capture those shares. If they can retire another 600+ million by then, at an average price near $33, they should be able to pump book value up to $70 by the elections. With the current normalized 4% ROI that puts next years year's core earnings near $3/shr. With their prospect of raising core ROI to 6%, that raises earnings north of $4. More equity purchases will raise that further. There's no quick buck here, but the 3 year outlook looks awesome. Link to comment Share on other sites More sharing options...
mankap Posted May 7, 2012 Share Posted May 7, 2012 Treasury now expects $5.8B instead of $5B. This will take down the stake of treasury to 61%. LOS ANGELES (MarketWatch) -- The U.S. Treasury Department late Monday said it expects to receive an additional $750 million from its underwritten public offering of common stock in insurer American International Group Inc. AIG -3.02% . The additional proceeds come from an exercise by underwriters of an over-allotment option to purchase about 24.6 million additional AIG common shares at $30.50 each. Treasury expects to tally overall proceeds from the offering of $5.8 billion, it said. Treasury's stake in AIG's outstanding shares will be cut to 61% from 70% as a result of the offering. http://www.marketwatch.com/story/treasury-expects-58-bln-from-sale-of-aig-shares-2012-05-07?siteid=yhoof2 Link to comment Share on other sites More sharing options...
txlaw Posted May 7, 2012 Share Posted May 7, 2012 Treasury now expects $5.8B instead of $5B. This will take down the stake of treasury to 61%. LOS ANGELES (MarketWatch) -- The U.S. Treasury Department late Monday said it expects to receive an additional $750 million from its underwritten public offering of common stock in insurer American International Group Inc. AIG -3.02% . The additional proceeds come from an exercise by underwriters of an over-allotment option to purchase about 24.6 million additional AIG common shares at $30.50 each. Treasury expects to tally overall proceeds from the offering of $5.8 billion, it said. Treasury's stake in AIG's outstanding shares will be cut to 61% from 70% as a result of the offering. http://www.marketwatch.com/story/treasury-expects-58-bln-from-sale-of-aig-shares-2012-05-07?siteid=yhoof2 Looks like the ratcheting up of the "floor price" for the share offerings is working. It seems people are expecting that the next offering will be above the $30.50 price. Doesn't hurt that AIG keeps participating in these offerings, generating value for the non-government shareholders. Link to comment Share on other sites More sharing options...
PlanMaestro Posted May 8, 2012 Author Share Posted May 8, 2012 GAO update http://www.gao.gov/products/GAO-12-574 http://www.gao.gov/assets/600/590677.pdf Based on the $30.83 closing share price of AIG common stock on March 30, 2012, Treasury could recoup the total value of assistance extended to AIG and take in an additional $2.7 billion including dividends. The remaining assistance through Maiden Lane III will likely be repaid in full and net additional returns to the government. When all the assistance is considered, the amount the federal government ultimately takes in could exceed the total support extended to AIG by more than $15.1 billion. This analysis is primarily based on repayments and recoveries and market valuation of AIG’s stock and does not include estimates of subsidy costs associated with the assistance. ..... Several indicators show that in 2011, AIG had positive net income and its insurance operations were stable and profitable. AIG had a net income for 2011 of $18.5 billion, primarily attributable to an income tax benefit and divested businesses. AIG’s operating cash flows declined in 2011, which was mostly due to cash payments covering several years of accrued interest and fees on the FRBNY revolving credit facility and reduction in cash flows from the absence of a full year of operating cash flows of foreign life subsidiaries that were sold during the year. Also, payments on catastrophic loss claims and asbestos liabilities reduced operating cash flows. The indicator on AIG’s quarterly insurance operating performance shows that AIG was profitable in most quarters and that investment income contributed considerably to that profitability, including several quarters when insurance underwriting by itself was not profitable. The sustainability of any positive trends in AIG’s operations will depend on how well it manages its business in the current economic environment. GAO will continue to monitor these issues. Link to comment Share on other sites More sharing options...
CONeal Posted May 8, 2012 Share Posted May 8, 2012 Tilsn has given up the green light to buy AIG. His unique view is that the gov't could shed their entire stak in 1-2 years. ::) http://blogs.barrons.com/focusonfunds/2012/05/07/tilsons-latest-buy-aig/?mod=yahoobarrons Link to comment Share on other sites More sharing options...
Sullivcd Posted May 8, 2012 Share Posted May 8, 2012 Uh oh http://www.cnbc.com/id/47330390 Link to comment Share on other sites More sharing options...
keerthiprasad Posted May 8, 2012 Share Posted May 8, 2012 Tilsn has given up the green light to buy AIG. His unique view is that the gov't could shed their entire stak in 1-2 years. ::) http://blogs.barrons.com/focusonfunds/2012/05/07/tilsons-latest-buy-aig/?mod=yahoobarrons LOL. Once again, I am so glad that Tilson has offered his opinion. Do people seriously follow him? Link to comment Share on other sites More sharing options...
PlanMaestro Posted May 8, 2012 Author Share Posted May 8, 2012 He has slides ... http://www.scribd.com/doc/92756415/T2Partners-ValueInvestingCongress-5712 Link to comment Share on other sites More sharing options...
Uccmal Posted May 8, 2012 Share Posted May 8, 2012 Nice presentation. Thanks. Link to comment Share on other sites More sharing options...
BargainValueHunter Posted May 8, 2012 Share Posted May 8, 2012 I know Berkowitz wasn't the first post-crisis manager to pound the table for AIG but he was certainly the most vocal when the idea of a recovered AIG was laughable to most. Have any of the "household name" opinion makers given him credit for seeing the value early? I'm thinking Cramer and Tilson, specifically. Link to comment Share on other sites More sharing options...
txlaw Posted May 8, 2012 Share Posted May 8, 2012 I know Berkowitz wasn't the first post-crisis manager to pound the table for AIG but he was certainly the most vocal when the idea of a recovered AIG was laughable to most. Have any of the "household name" opinion makers given him credit for seeing the value early? I'm thinking Cramer and Tilson, specifically. Of course not. Bruce B will be right on MBI, BAC, AIG, and maybe even JOE. And he won't get any credit for it among the household names until maybe the next time he's featured as a Morningstar fund manager of the year a couple years from now. And at that point, they will refer to these years as the time he fell off, when in actuality, this is when he was setting his long term shareholders up for extreme outperformance. I mean, even his former analysts appear to have thrown him under the bus for his position in financials. But this guy will just keep doing his thing -- that is, compounding wealth at an excellent rate. Link to comment Share on other sites More sharing options...
nkp007 Posted May 8, 2012 Share Posted May 8, 2012 Gotta respect the guy for sticking to his guns. He is one of the ballsiest and decisive investors out there. (I used to work for him) Link to comment Share on other sites More sharing options...
txlaw Posted May 8, 2012 Share Posted May 8, 2012 Gotta respect the guy for sticking to his guns. He is one of the ballsiest and decisive investors out there. (I used to work for him) I retract my comment about former analysts throwing Bruce B under the bus. ;D Link to comment Share on other sites More sharing options...
nkp007 Posted May 8, 2012 Share Posted May 8, 2012 Gotta respect the guy for sticking to his guns. He is one of the ballsiest and decisive investors out there. (I used to work for him) I retract my comment about former analysts throwing Bruce B under the bus. ;D Haha. His work ethic and pure, unbridled focus really is something. He also has an impressive ability to turn an issue over in his mind in a few hundred different ways. What if A happened? Then B. What if Z happened? Then X. If B and X happen...lollapalooza! Link to comment Share on other sites More sharing options...
PlanMaestro Posted May 8, 2012 Author Share Posted May 8, 2012 Haha. His work ethic and pure, unbridled focus really is something. He also has an impressive ability to turn an issue over in his mind in a few hundred different ways. What if A happened? Then B. What if Z happened? Then X. If B and X happen...lollapalooza! And I imagine that is not easy to work for him ... hehehe. If BB takes a look at anything, it at least merits to go to the watchlist. He tends to be too early, but also tends to be right. Rule #1 indeed. Does anyone remember BB investing in any wipeout or a company that over time got wiped-out? I imagine that there must be some, but considering that he often swings for the home run, and in financials of all places, that is truly a remarkable record. Link to comment Share on other sites More sharing options...
finetrader Posted May 8, 2012 Share Posted May 8, 2012 I just switched from the warrants to common AIG warrants are up 44% in the last 1 year while common are up only ~5%. Link to comment Share on other sites More sharing options...
racemize Posted May 8, 2012 Share Posted May 8, 2012 are there any bears (or at least not bulls) on AIG around? I could use some considered views on the other side... Edit: to clarify, I mean over 3+ year time frame (not short term). Link to comment Share on other sites More sharing options...
txlaw Posted May 8, 2012 Share Posted May 8, 2012 are there any bears (or at least not bulls) on AIG around? I could use some considered views on the other side... Not sure. Even Cliff Gallant, the much touted financial sector analyst who testified to Congress that AIG might only be worth $6 per share (!), has changed his tune. Link to comment Share on other sites More sharing options...
hardincap Posted May 8, 2012 Share Posted May 8, 2012 Last year regarding his financial purchases Berkowitz said "in a year we'll know if I'm smart or dumb". This year he's saying he doesn't know why 1 revolution around the sun means anything. Anyone have any thoughts on this? He also says he wants people to tell him why he's wrong, but refuses to talk to Einhorn about JOE. What the?? Link to comment Share on other sites More sharing options...
enoch01 Posted May 8, 2012 Share Posted May 8, 2012 are there any bears (or at least not bulls) on AIG around? I could use some considered views on the other side... This isn't a direct answer to your question, but probably relevant. Tilson's presentation had an interesting slide (#29), showing the responses to the following question: Question to fund managers: Have you considered an investment in AIG? Answers: “It might be a good investment but it could upset some current and potential investors if we were to own AIG.” Portfolio Manager, Major Mutual Fund, NY “I would not want to be in a position to tell constituents we lost money investing in AIG” Investment Manager, Large Pension Fund, CA “We so painfully owned it in the crisis, we could not own AIG again.” FIG Analyst, Major Mutual Fund, MA It can't be that easy to explain away why it is cheap, but that's probably some of it. Personally I do have some concern about the book of business from 2008-2009. The culture was so disrupted and chaotic that some real crap may have been written. Just have to wait for it to season. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now