Rumors Berkowitz, Others Are Unloading Their AIG Stock
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We are hearing rumors that Bruce Berkowitz of Fairholme Capital is selling his massive AIG (NYSE: AIG) stake before the government has a chance to sell their shares.
Berkowitz, currently owns 44,294,324 AIG shares, or 31.6% of the current shares outstanding. He will also get about 24M warrants. His percentage stake will decrease dramatically once the government gets their shares.
Yesterday was the record date on AIG warrants, so it appears he is still entitled to receive those and now is free to sell the core common stock position.
The warrant distribution could help explain the two day selling pressure in the stock, as Berkowitz and other holders will now get those extra shares and don't have to hold on to their current shares.
If Berkowitz is not selling, then other smart money hedge funds appear to be unloading.
Berkowitz is a 13D filer on AIG, meaning he will have to "promptly" update any material change in his holdings.
Shares are down 4.5%.
UPDATE: The ex-dividend date is January 20, the day following the distribution of the warrants. Currently shares are trading with "Due Bill" attached through January 19, 2011, meaning with the right to receive the dividend for buyers. Sellers of the stock before the ex-dividend date sell away their right to the stock dividend. The common shares will begin trading regular way, ex-dividend, on January 20, 2011.
UPDATE 2: Bruce Berkowitz told Dow Jones newswires that he plans to keep his AIG stock, calling it a cornerstone investment. "It's a great company, a great franchise, and we look forward to the company paying back the remainder of what it owes to U.S. taxpayers and moving forward," Berkowitz told Dow Jones. "We are planning to be long-term shareholders."
Berkowitz, currently owns 44,294,324 AIG shares, or 31.6% of the current shares outstanding. He will also get about 24M warrants. His percentage stake will decrease dramatically once the government gets their shares.
Yesterday was the record date on AIG warrants, so it appears he is still entitled to receive those and now is free to sell the core common stock position.
The warrant distribution could help explain the two day selling pressure in the stock, as Berkowitz and other holders will now get those extra shares and don't have to hold on to their current shares.
If Berkowitz is not selling, then other smart money hedge funds appear to be unloading.
Berkowitz is a 13D filer on AIG, meaning he will have to "promptly" update any material change in his holdings.
Shares are down 4.5%.
UPDATE: The ex-dividend date is January 20, the day following the distribution of the warrants. Currently shares are trading with "Due Bill" attached through January 19, 2011, meaning with the right to receive the dividend for buyers. Sellers of the stock before the ex-dividend date sell away their right to the stock dividend. The common shares will begin trading regular way, ex-dividend, on January 20, 2011.
UPDATE 2: Bruce Berkowitz told Dow Jones newswires that he plans to keep his AIG stock, calling it a cornerstone investment. "It's a great company, a great franchise, and we look forward to the company paying back the remainder of what it owes to U.S. taxpayers and moving forward," Berkowitz told Dow Jones. "We are planning to be long-term shareholders."
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