AIG stock price forecast 2010
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By the end of 2009, investors were cautious but wanting to deal with AIG once again. The company narrowly avoided doom in 2008, and after drastic change and a huge government bailout, AIG was on the road to recovery. However, as the company has released its fourth-quarter reports, analysts and investors all have a different take. AIG’s situation is complicated- after the financial crisis that gripped the entire country, it had to rely on a $180 billion government bailout just to remain in business. The company now needs to figure out how it will repay the loan and keep afloat at the same time. When taking a look at the numbers for the fourth quarter, the answers may not be so clear-cut. The company posted a loss, but the loss was less than for the same period a year ago (it dropped from $61.7 billion to $8.87 billion). However, the comparison is made with the worst quarterly loss by any US company in history. AIG’s investors aren’t happy, because the loss comes after two profitable quarters, and it was still larger than expected. Investors are worried about AIG’s future. The company had previously assembled a plan to use cash from life insurance policy premiums in order to repay the Federal loan it received. They’ve just announced that this may not be necessary, because they are more financially solvent and will be able to use other money to repay the debt. However, there is another side to this issue. In recent reports, AIG says that they may not be able to remain solvent without additional government help. That’s not a good sign for a company that’s still $100 billion in the hole, and they have plans in the works to sell off parts of their company in order to raise the necessary funds. It remains to be seen whether investors will stick around to see what happens with AIG. | |