Will AIG survive tough times?
September 17, 2008 12:54pm CST
In past nine months, the company has lost more than $18.0 billion in investments linked to credit crisis. The firm has reported about $25 billion in write downs in three previous quarters on the swaps. The shares of the company have taken a beating on the Wall Street and are trading at 15 year low. The stocks are down 83% from 52 week high made in October2007. Last week saw the worst, with stocks sliding 46 percent. The firm has been facing difficulty in maintaining its financial strength as its assets are falling in value.The company’s chief executive, Robert B. Willumstad who is under pressure to arrest any further meltdown in investor's wealth, announced to unveil a master plan Sept. 25 to turn the company around. Please comment with your financial expert views about the company prospects and will it be able to survive the turmoil ahead and if yes, for what period?
17 Sep 08
First and foremost I am FAR from being any financial expert but here's my comments anyway.... It appears the the Treasury is actually going to assist AIG on this one. This is unprecedented but is definitely understandable. After Lehmann crashing to have a second financial giant fall would be devastating to not just the US market but the global markets as well. Barclays have also stepped in and purchased certain assets of Lehmann for around 1.8 billion dollars or so (I am not 100% sure of the amount) so it seems both companies may have some respite. Time will tell if AIG can be turned around or not but the stepping in of the US Government is a positive sign that they may just make it through this. It WILL take time for investor confidence to get back on track though and it is very fortunate that oil prices are at least falling for now because this helps slow overall panic and spending reductions by consumers.