AIG Stock Price: A Roller Coaster Ride from Here on Out

When it comes to AIG or American International Group, there is no larger insurance underwriter of commercial and industrial insurance in the United States. However, over the past couple of years, few corporations have been under the scrutiny that has continued to plague AIG. While this obviously has affected the AIG stock price, it’s hitting many people a lot harder than just on Wall Street.

AIG was once the 18th largest corporation in the world according to Forbes Global 2000 List. Originally founded in Shanghai, China in 1919, there is quite a history to this mega insurance giant. It’s not all a glorious one either. The AIG stock price was listed on the Dow Jones Industrial from April 8, 2004 to September 22, 2009. However, in September of 2009, AIG suffered a “liquidity crisis” when the company’s credit rating dropped to AA levels.

The Federal Reserve Bank enabled the company to meet the increased collateral responsibilities with a credit facility for $85 billion. In return for this, AIG issued a stock warrant to the Federal Reserve Bank for 79.9% of AIG’s equity.

By May of 2009, the United States Treasury and the Federal Reserve Bank added more financial support to AIG, which caused the AIG stock price to stabilize somewhat. However, this support can to the tune of $70 billion investment, a credit line of $60 billion, and $52.5 billion to purchase mortgage-based assets that were guaranteed or owned by AIG. As a result, AIG sold several subsidiaries and many other assets in an attempt to pay down some of the loans received. Even today, AIG continues to look for buyers of its assets.

In March 2009, the AIG stock price tumbled yet again with the announcement of $165 million to be paid out for retention payments and bonuses. The general public was outraged, for the most part. It was difficult for many to see where bonuses were warranted with such a large company buyout.

The Future of AIG Stock Price

While you may think that all of this has put the price of AIG stock in the toilet, you’d be wrong. In August and September of 2009, the AGI stock price has risen almost 300%. Is now the time to hold onto the shares you have or dump them immediately? Most experts are advising to hold on to stock in AIG. While an investment is never, ever a sure thing, AIG shows signs of strengthening, even as they work to repay the billions in loans from the government. With a new CEO in place, many wonder if Robert Benmousche will be able to turn the corporation around. Only time will tell.

A Few Final Thoughts

For those that still stock, the AIG stock price is so erratic, it’s really difficult to decide which is best. While you certainly don’t want to see the stock bottom out, it’s always a possibility. However, it’s also difficult to imagine the same AIG stock price prior to 2008.

AIG Stock Price Tip #1

Buy? Sell? Trade? It’s best to speak with your broker about your AIG stock, rather than listening to ranting and ravings of the press.

AIG Stock Price Tip #2

While it’s doubtful that AIG will reach the $300 a share that it had before, many analysts predict that it will continue to rise and fall throughout the next several months before settling around $55 a share. However, an expert is only considered an expert when they’re right!

AIG Stock Price Tip #3

Above all, do your own research and understand what it going with company before you buy or sell AIG stock.