AIG Gives Big Bonuses to Investors

by The Investment U Research Team

On Friday morning, we talked about how interesting American International Group (NYSE: AIG) was getting in “As AIG Sinks, It’s Value Rises.” We didn’t have to wait long for reaction. By the end of the day, it was up over 20% and this morning we’re seeing another 25%.

In fact, anyone jumping in early Friday morning when our issue went out is looking at over 70% in two days – Not bad at all.

Apparently, we weren’t the only ones looking at AIG as a bargain – even with the hubbub over AIG’s bonuses and lack of equity. The ones really getting bonuses at AIG were the investors from Friday morning.

The bigger question now is how big a rebound we’ll see over the next couple of days, and is this the result of short covering? Almost 10% of AIG shares have been sold short over the past few weeks.

We could be seeing short covering as institutions buy back their borrowed shares, and if we haven’t, then this price surge could continue as shorts are forced to cover.

One of our experts was scratching his head at why anyone would want to invest in this company right now. The answer seems to be clear – Investors aren’t. It’s the traders, speculators and the shorts who are moving this stock around.

We’ll continue to watch this, and see if there are any other John Templeton prospects out there in the next few weeks.

Symbols mentioned in this article: AIG.

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