Treasury sells 200 million AIG shares
STEVE CHIOTAKIS: The Treasury Department says it sold 200 million shares of AIG stock at $29 apiece. The good news is the sale made a small profit for taxpayers who bailed out the insurance giant. The not-so-good news is the government remains the majority owner and the company is still struggling.
Marketplace’s John Dimsdale is with us LIVE from Washington with the latest on this story. Good morning John.
JOHN DIMSDALE: Good morning Steve.
CHIOTAKIS: So, how much did taxpayers make on the sale?
DIMSDALE: Well, the government sold at just above the break-even point. And made about a $50 million. This will all help wind down the government’s TARP program which was designed to bailout the banks and insurance companies that were failing in 2008. Before yesterday’s sale, Treasury’s stake in AIG was 92 percent. It’s now down to 77 percent.
CHIOTAKIS: All right — 77 percent though John, is still a big number. Why didn’t the government sell more?
DIMSDALE: Well, Treasury is trying to sell its investments in an orderly way without offering more shares than the market will bear. Besides, Tim Massad, the acting Treasury Secretary for Financial Stability, says the government’s not aiming to earn money.
TIM MASSAD: The government isn’t a hedge fund. We’re not trying to make investments to make a profit. But the fact is that we are hopeful we can recover almost all the money invested under the TARP program and that’s great news for the American taxpayer.
CHIOTAKIS: John, will taxpayers ever be completely off the hook of AIG ownership?
DIMSDALE: The company has restructured but remember it is in the insurance business and there’s a lot of concern that it’s on the hook for big losses from storms and floods and earthquakes here and abroad. That could hurt the company’s stocks. Still, the new CEO says he aims to be rid of all government ownership by the middle of 2012.
CHIOTAKIS: John, thank you.
DIMSDALE: Thank you.
CHIOTAKIS: Marketplace’s John Dimsdale in Washington.
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