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American International Group, Inc. Message Board

  • hxw13 hxw13 Sep 18, 2008 4:42 PM Flag

    Dilution? No.. here is why...And AIG should go above $7...

    From AIG 8-K:
    In connection with the revolving credit facility, AIG issued a warrant to the Board of Governors of the Federal Reserve ("Federal Reserve") that permits the Federal Reserve, subject to shareholder approval, to obtain up to 79.9% of the outstanding common stock of AIG (after taking into account the exercise of the warrant). AIG anticipates calling a special meeting for such purpose as promptly as practicable.
    A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

    Definition of outstanding shares: includes restricted shares (shares owned by officers and insiders of the company) as well as shares held by the public. Shares that the company has repurchased or retired are not considered outstanding stock.

    Regardless whether or not the shareholders approve or not, why there is dilution even if USG buy 80% of outstanding shares?

    Any CPA here to explain?

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