Rumor is AIG will actually post earnings this quarter. Many insurers had to mark down their assets to ridiculously low levels q4 of last year and q1 of this year due to the market downturn. With the markets now up heavily since March, a lot of their assets are now much more valuable. This includes their equity positions.
Let me see. AIG was a penny stock, went over a dollar, announced a reverse split,reduced your shares 20-1 post reverse split and dropped from $23 to above $9 and you say being short is risky. I think being long was disastrous.
I believe that being short right here is very risky. I never said anything about before this. The company's exposure to CDS's is significantly less than it was before, they're beginning to sell off assets, they will be spinning of two huge insurance divisions valued at over $40 Billion, the equity markets have risen 45% (therefore increasing the value of all of their equity positions that were at huge unrealized losses), and there is a significant short position. All of these factors make for a potentially high reward long position.