American International Group

AIG Stock Sale Makes it a "Buy" (NYSE: AIG)

The U.S. Treasury Department has sold off its remaining shares of American International Group (NYSE: AIG), acquired in a financial crisis bailout move.

The Treasury had 234.17 million shares left, or roughly 16% of the insurance giant's outstanding stock.

After unburdening itself from its mountainous holding, the Treasury will only own warrants to purchase additional shares of AIG.

Monday's stock sale announcement follows the department's September sale of about 554 million shares to the public at $32.50 per share. That liquidation marked the end of the Treasury's majority ownership in the firm.

This final stock sale is good news for AIG and its shareholders - and U.S. taxpayers.

"The closing of this transaction will mark the full resolution of America's financial support of AIG-with a profit to taxpayers of $22.7 billion to date. It marks on of the most extraordinary-and what many believed to be the most unlikely turnaround in American business history. And you did it," AIG CEO Robert Benmosche penned in a company email to employees on Tuesday.

After the news, Sterne, Agee & Leach, who give AIG a "Buy" rating, said the sale was good for investors.

"With the U.S. Treasury now out of the stock and AIG once again a 100% privately held company, we expect management will be able to turn its full attention to managing the company to drive improved financial performance and higher return on equity," wrote analysts.

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Obama Bank Tax No Reason to Flee Financials

U.S. President Barack Obama plans to implement a tax on financial institutions to offset taxpayer losses stemming from the Troubled Asset Relief Program (TARP) and help reduce the deficit. But Obama's new bank tax is no reason to turn bearish on financials, which staged an impressive comeback last year.

At a time when many financial companies are gearing up to announce fourth-quarter and full-year earnings, as well as details regarding employee compensation and bonus payments for 2009, the government is considering charging banks fees to recover as much as $120 billion in lost taxpayer money.

While most of the big banks have started paying back their TARP investments, the government has yet to recoup large swathes of money that went to American International Group Inc. (NYSE: AIG), General Motors Corp., and Chrysler LLC. Last month, the Treasury estimated that the net cost of TARP to taxpayers would be $41.4 billion.

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