Posts Tagged "Government Bailout"


Monday, March 2nd, 2009

200px-aig_wordmarksvgI know if AIG goes out of business in one way or another (bankruptcy, getting burned to the ground by rioters, etc) – there will be tremendous repercussions for the US and possibly world economy.  But seriously, their stock market cap is $1.24 billion dollars (and this is after today’s jump in price after it was announced that they’re getting another $30 billion in Government aid).  I must be missing something about the structure of AIG’s stock – this market cap number has got to be missing a big chunk of whatever it is that makes up AIG’s mass.  I mean, their total loss for 2009 is somewhere in the ballpark of $90 billion dollars.  Even at their 52 week high of $51.47 a share – their market cap is somewhere in the ballpark of $138 billion.  And guess what, so far the government aid package has totalled $150 billion to them.

I know, I know – a trillion dollars in assets and almost that much in liabilities.  A big number minus another big number plus a stream of drops in the bucket in government aid equals a really bizzare stock valuation.  Thats why I titled this one AIG WTF!

Astronomers – if you’re tired of looking for dark matter in space, take a look over at AIG – they’ve got something that apparently has mass but cannot be seen or detected in any way whatsoever.  Bizzare, this is one of the reasons I am glad I’m an engineer.  Sometimes finance is less intuitive than quantum physics.