LONGS, DO YOU KNOW WHAT *SEVERELY* DILUTIVE MEANS?
where is everyone getting the 20% from. for shareholders to only own 20% than the FED would have to own 80%....2.6billion shares x 4 = 10.4 billion shares....that is how many shares the FED would have to control to own 80% of AIG. I don't know any stock with 12 billion shares outstanding.
i read the deal as the FED would recieve 80% of the equity value of AIG in the form of warrents. AIG market cap is $10b.....so 80% of $10B is $8B. so the FED would own 45% of AIG not 80%, plus we don't know the conversion rate or price of the warrants. the warrants could have a price of $10. so that would mean 800 million new shares. 800 million shares is a big difference from 10.4 billion shares