racemize Posted February 7, 2013 Share Posted February 7, 2013 Somebody a while back explained that the company will just distribute shares to you at expiry if you don't exercise. So say the stock is at $120 and the strike is at $40. They'll just distribute $80 worth of stock to you. That way you don't need any capital to exercise them. Is this information accurate? That's very interesting, I'd like to know as well. Link to comment Share on other sites More sharing options...
Olmsted Posted February 7, 2013 Share Posted February 7, 2013 Somebody a while back explained that the company will just distribute shares to you at expiry if you don't exercise. So say the stock is at $120 and the strike is at $40. They'll just distribute $80 worth of stock to you. That way you don't need any capital to exercise them. Is this information accurate? That describes a "cashless exercise" provision which you see in some warrants. Not, to my knowledge, in any TARP warrants. In fact, I just glanced through the AIG prospectus and verified that there is no cashless exercise provision. This excerpt from page S-1 spells it out pretty clearly: Exercise Price $45.00 per share, subject to adjustment. The Warrants require the payment of cash consideration. Link to comment Share on other sites More sharing options...
tng Posted February 7, 2013 Share Posted February 7, 2013 Most brokers will offer to do what is effectively a cashless exercise for you if you call them. They would simultaneously exercise and sell/short shares on the market so you don't need to hold any cash in your account. It's a risk free transaction for them and they love the easy commission. Link to comment Share on other sites More sharing options...
mhdousa Posted February 7, 2013 Share Posted February 7, 2013 Regarding the liquidity of the warrants: I've currently got an open order at the current price to sell 1000 warrants (i.e. the current price is 14.5 and my limit price is 14.5). However, the order is only partially filling. I'm wondering how Berkowitz is going to eventually get rid of these when they are so thinly traded and he owns 1/3 of the outstanding? Lower it a little and I'll take 'em. I have an order pending... Yeah, I was about to say, it seems like someone on this board would buy them. Any reason for selling them at this level? Conflict of interest rules at work. Link to comment Share on other sites More sharing options...
sampr01 Posted February 7, 2013 Share Posted February 7, 2013 Conflict of interest rules at work. Did you able to sell them.. I placed an order for AIGWS @14.55.. but not filled yet. Thanks Link to comment Share on other sites More sharing options...
Olmsted Posted February 8, 2013 Share Posted February 8, 2013 Somebody a while back explained that the company will just distribute shares to you at expiry if you don't exercise. So say the stock is at $120 and the strike is at $40. They'll just distribute $80 worth of stock to you. That way you don't need any capital to exercise them. Is this information accurate? That describes a "cashless exercise" provision which you see in some warrants. Not, to my knowledge, in any TARP warrants. In fact, I just glanced through the AIG prospectus and verified that there is no cashless exercise provision. This excerpt from page S-1 spells it out pretty clearly: Exercise Price $45.00 per share, subject to adjustment. The Warrants require the payment of cash consideration. Update: I only checked AIG's prospectus earlier, but Rabbitisrich pointed out to me that some of the TARP warrants only have a cashless exercise, like BAC-WTA. AIG warrant info is still correct. Most brokers will offer to do what is effectively a cashless exercise for you if you call them. They would simultaneously exercise and sell/short shares on the market so you don't need to hold any cash in your account. It's a risk free transaction for them and they love the easy commission. Interesting - was not aware this was common, but it makes sense. Thanks! Link to comment Share on other sites More sharing options...
bargainman Posted February 8, 2013 Share Posted February 8, 2013 With options you can usually exercise and sell on same day, so he doesn't necessarily need the capital or he may be able to do borrow it just for a day and sell. Link to comment Share on other sites More sharing options...
robface Posted February 11, 2013 Share Posted February 11, 2013 Hey all - sorry if this question has already been answered in depth, but just wanted to ask about improving ROE metrics... Seems like the ROE of AIG by segment is quite low - what's to make it rise to levels where management forecasts? Is it just better underwriting? Is it just raising prices on contract, or better predicting losses or decreasing expenses? AIG appears to have been more concerned about share and volume rather than underwriting profitability and therefore underwrote poorly. What happens to the market share of AIG once their underwriting improves? Will it still have the same market share or about there? Link to comment Share on other sites More sharing options...
nkp007 Posted February 13, 2013 Share Posted February 13, 2013 Guys, it may be time to sell AIG. The bubble is about to pop: http://www.youtube.com/watch?v=UFkYlBBBd7g Link to comment Share on other sites More sharing options...
muscleman Posted February 13, 2013 Share Posted February 13, 2013 Guys, it may be time to sell AIG. The bubble is about to pop: http://www.youtube.com/watch?v=UFkYlBBBd7g Lol. Link to comment Share on other sites More sharing options...
Olmsted Posted February 13, 2013 Share Posted February 13, 2013 Guys, it may be time to sell AIG. The bubble is about to pop: http://www.youtube.com/watch?v=UFkYlBBBd7g That's one way to get noticed by buyside employers. Anyone hiring this guy? Link to comment Share on other sites More sharing options...
PlanMaestro Posted February 13, 2013 Author Share Posted February 13, 2013 Anyone hiring this guy? He looks like a young Seth Klarman. Link to comment Share on other sites More sharing options...
benhacker Posted February 13, 2013 Share Posted February 13, 2013 He looks like a young Seth Klarman. Speak of the devil, he just disclosed a stake in AIG (about $0.25B). Nice confirmation. I am not as smart as Klarman or many on this board so I only bought my initial stake recently... glad I overcame old misconceptions. Ben Link to comment Share on other sites More sharing options...
mrvlad0 Posted February 13, 2013 Share Posted February 13, 2013 Klarman's Baupost Group Enters AIG http://www.streetinsider.com/13Fs/Klarmans+Baupost+Group+Enters+AIG+%28AIG%29,+Trims+Oracle+%28ORCL%29,+Liquidates+HP+%28HPQ%29/8093151.html New Stakes American International Group, Inc. (NYSE: AIG) new 7,000,000 share position Link to comment Share on other sites More sharing options...
PlanMaestro Posted February 13, 2013 Author Share Posted February 13, 2013 Is this a crowded long or what. Berkowitz, Klarman, Loeb, Tepper, Cooperman, Nygren, Pzena, Romick. And what a mix of characters and strategies. Link to comment Share on other sites More sharing options...
nkp007 Posted February 13, 2013 Share Posted February 13, 2013 Is this a crowded long or what. Berkowitz, Klarman, Loeb, Tepper, Cooperman, Nygren, Pzena, Romick. And what a mix of characters and strategies. You forgot [move]NKP007[/move] Link to comment Share on other sites More sharing options...
PlanMaestro Posted February 13, 2013 Author Share Posted February 13, 2013 Man, now I have to clean that screen AGAIN! Link to comment Share on other sites More sharing options...
gokou3 Posted February 14, 2013 Share Posted February 14, 2013 Is this a crowded long or what. Berkowitz, Klarman, Loeb, Tepper, Cooperman, Nygren, Pzena, Romick. And what a mix of characters and strategies. About 20% of the O/S are owned by the "Gurus": http://www.gurufocus.com/gurutrades/AIG Link to comment Share on other sites More sharing options...
EdWatchesBoxing Posted February 14, 2013 Share Posted February 14, 2013 Guys, it may be time to sell AIG. The bubble is about to pop: http://www.youtube.com/watch?v=UFkYlBBBd7g LOL A+ post AIG Up in heaaarrr! Link to comment Share on other sites More sharing options...
stahleyp Posted February 14, 2013 Share Posted February 14, 2013 haha. that video is awesome. 40 shares. balla. ;) Link to comment Share on other sites More sharing options...
berkshiremystery Posted February 14, 2013 Share Posted February 14, 2013 Hope I don't scare anybody before bedtime.... ;D http://www.youtube.com/watch?v=9VvGW98D3XA Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 15, 2013 Share Posted February 15, 2013 http://www.bloomberg.com/news/2013-02-15/soros-och-ziff-cut-aig-holdings-as-baupost-takes-stake.html Link to comment Share on other sites More sharing options...
cogitator99 Posted February 19, 2013 Share Posted February 19, 2013 AIG to Purchase Outstanding Interest in AIG Israel ONDON--(BUSINESS WIRE)--Feb. 18, 2013-- American International Group, Inc. (NYSE: AIG) announced today that it has reached an agreement with Aurec Gold Investments Limited (Aurec) to acquire Aurec’s 49.99% interest in AIG Israel Insurance Company Ltd. (AIG Israel). AIG currently owns 50.01% of AIG Israel, and upon completion of the transaction AIG Israel will become wholly-owned by AIG. The transaction is subject to approval by the Israel Insurance Commissioner. AIG and Aurec formed AIG Israel in 1996 as a joint venture. The operation primarily writes personal lines as well as accident & health and life insurance through a direct distribution platform, and it encompasses some commercial lines products via brokers. AIG Israel has achieved steady growth and profitability each year since 2001. Rob Schimek, President and Chief Executive Officer of AIG’s EMEA region, said, “Our decision to acquire the remaining interest in AIG Israel represents an excellent opportunity to increase our presence in Israel, as well as to further integrate an important operation as part of our global platform. We are pleased that this transaction will enable us to continue to strengthen our market position in a country that is a core component of AIG’s business in the EMEA region.” Link to comment Share on other sites More sharing options...
JRH Posted February 19, 2013 Share Posted February 19, 2013 AIG is tendering to retire debt of certain classes: http://finance.yahoo.com/news/aig-commences-tender-offers-1-145000882.html Link to comment Share on other sites More sharing options...
longlake95 Posted February 19, 2013 Share Posted February 19, 2013 That AIG video made my morning!!! ;D Link to comment Share on other sites More sharing options...
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