American International Group Inc. (NYSE: AIG)
AIG last week priced new equity, allowing the government to unwind some of its position. The U.S. Treasury sold 200 million shares, or 15% of its AIG stake on Tuesday, but still has 77% ownership of the insurer and another 1.5 billion shares to sell before it is fully out of its investment.
That means this is just the first of many liquidity events. And you don't want to own a stock when you know that a company's largest equity holder is on a mission to get out of its position. Long-term weakness will prevail in this case.
So it's time to "Sell" AIG -- until the U.S. government finishes diluting current shareholders by dumping its equity.