Is The AIG "Re-IPO" A Good Deal For Taxpayers? (AIG)

This morning, AIG

and the U.S. Treasury

that they would be going ahead with the "re-IPO" of AIG, and sell a combined 300 million shares of the embattled insurer back to the public. With AIG's share slide since the beginning of the year, is a $9 billion offering in the best interest of the U.S. taxpayer, which owns 92% of the company? At yesterday's closing price, the 300 million shares were worth $8.89 billion. Shares are down another 1% this morning, to $29.30. The breakeven point on shares is $28.73, and shares are rapidly approaching that number. The initial plan was for the U.S. Treasury to sell a larger portion of AIG stock, perhaps as much as $15 billion, but that was when the share price was much higher. Shares have continued to slide, and even Bruce Berkowitz, the largest shareholder of AIG outside of the government, said that the investment is a mistake. I believe that the offering probably should be cut, perhaps by 50 million shares or so, and the U.S. government should sell its stake first, then AIG. The taxpayer needs to be repaid in full, after handing the company approximately $182 billion during the financial crisis in 2008. AIG still owes the Treasury $60 billion, and the $9 billion offering would cut that by 20% or so. AIG needs to prove that it is a healthy company, while making the taxpayer be repaid in full. We have a massive debt problem in this country, and the government can not afford to leave a single penny on the table in this instance. The markets will eventually take care of themselves, and AIG will eventually stop being a ward of the state. Just make sure the people who helped out in the beginning are taken care of first.