AIGshares dive on bearish note as new chief exec apologises for angry remarks
AILING US insurer AIG saw its shares plummet by over 20 per cent yesterday after a scathing analyst note, as new chief executive Robert Benmosche issued a humiliating apology for criticisms of the New York attorney general.
The bailed-out firm saw its shares fall from $45.3 to just $36 in a few hours’ trading yesterday, after Bernstein Research suggested the stock was virtually worthless.
Analyst Todd Bault reiterated his target price of $10, claiming the government may withdraw its lifeline support from the group once the firm is no longer deemed as posing a risk to the US economy.
“AIG’s current stock price gives virtually no weight to the possibility that the common equity is worth zero,” he said.
The note came on a bad day for Benmosche, who said he regretted criticising attorney general Andrew Cuomo during a meeting with his staff last month.
During the closed-doors meeting, Benmosche said Cuomo didn’t “deserve to be in government” and had acted like a “criminal” by issuing a subpoena to track down the details of bonuses that AIG paid to staff members.
He said he was trying to bolster morale at AIG, which is wrapped in a multi-year struggle to survive and has sold off billions of dollars of assets to try to repay a giant government bailout.
“I was a little too aggressive in my comments, but I was responding to enormous fear on the part of many, many associates,” he said in an interview.