i can't figure it out, a management change and a government backed potential assets sale don't add up to $23 on AIG, it could be the 18% short that's being squeezed or just a HUGE pump and dump.( imagine an offering right after close today)
AIG Reaches One-Month High as Radian Posts Profit (Update1) Share | Email | Print | A A A
By Hugh Son and Jeff Kearns
Aug. 5 (Bloomberg) -- American International Group Inc., the insurer bailed out by the U.S., gained 38 percent to a one- month high after Radian Group Inc. posted a profit, boosting shares of financial guarantors.
AIG advanced $5.17 to $18.69 at 12:46 p.m. in New York Stock Exchange composite trading. The insurer has plunged 97 percent in the past 12 months after the U.S. was forced to save the company from insolvency with a bailout that swelled to $182.5 billion.
Traders “are pointing to the Radian numbers that are taking all the financial guarantors higher,” said Robert Bolton, managing director for trading at Mendon Capital Advisors Corp.
Radian gained 51 percent, the most since going public in 1992 after posting a second-quarter profit on lower provisions for mortgage defaults. MGIC Investment Group Inc., Ambac Financial Group Inc. and Triad Guaranty Inc. each surged more than 15 percent. The companies protect lenders against defaults, or investors against declines in fixed income holdings, businesses that led to record losses at New York-based AIG.
AIG’s gain may be fueled by speculators buying back shares they borrowed and sold short, said Bolton and Michael James, a managing director at Wedbush Morgan Securities.
“People who were short were forced to cover their positions so there have been big short squeezes in some of the stocks that have done reverse splits,” James said. AIG gave investors one new share for every 20 they turned in on June 30.
Investors who sell short hope to profit by repurchasing the securities later at a lower price and returning them to the holder. More than 50 million shares changed hands, almost double the average full-day volume over the last four weeks.
Christina Pretto, a spokeswoman for AIG, declined to comment.
To contact the reporter on this story: Hugh Son in New York at hson1@bloomberg.net; Jeff Kearns in New York at jkearns3@bloomberg.
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