AIG shares fall after U.S. says it plans $18 billion sale

Answer 1

On Sunday, the US Treasury announced plans to sell $18 billion worth of American International Group (AIG) stocks in an effort to recover taxpayer money used as bailouts.    

During the financial crisis in 2008, the government rescued AIG with bailouts totaling $182 billion after incurring massive losses from sub-prime mortgage derivatives.

As a result, the government took about an 80% stake in AIG which was later reduced to its current level of 53%. The government's latest announcement will reduce its stake to 20%.

The bulk of the bailout funds have been recouped but AIG still owes the government $24.2 billion.

The announcement caused shares to fall 1.1% in afternoon Monday trading as investors expected the government stock sale to happen over a longer time period.