Most people would agree that without their US housing related problems they are worth about $80/share which is 12 times 2009 estimated earnings. That would be a market cap of about $202B. Since they are selling at about $113B market cap, that means the market is evaluating their housing related problems at a market value of negative $88B. Despite the fact that the company estimated the loss from these securities at less than $2B, this is simply ridiculous.
I have a similar sentiment but can't help but think there are some bad times coming for the price of the stock. It's very likely to be cheaper quite soon. See the article in today's WSJ. Lots to worry about.
If AIG can hold the assets it has had to mark to market and if they rebound in value, then we would see leaps in share price as the same assets that have beeen marked down would then be marked up.