So Hank Greenberg took the money, flogging off a good chunk of his AIG shares, along with another former AIG executive Edward Matthew, who sold off all his shares.
Bloomberg reports Friday that Greenberg sold 40m AIG shares for about $129m after the stock tumbled more than 90 per cent this year – just for “liquidity and other purposes”, according to regulatory filings.
Just as well then. Surely, we thought, it couldn’t be because Hank is giving up on his grand plans to raise funds for AIG and sees a massive dilution in his already battered stake coming his way with the federal bailout of the stricken insurer?
Starr International, a firm run by Greenberg, sold 35m AIG shares at $3.06 each, while Greenberg, 83, sold 5m shares for about $3.77 apiece – bringing his 13.6 per cent stake down to a bit more than 10 per cent of the company.
Meanwhile Matthews, reports the WSJ, a member of the Greenberg group, on Wednesday disclosed he sold all of his directly held shares of AIG – 82,507 shares he owned directly and all 23,500 shares held by his wife – for $5.27 a share.
My how times change.
As AIG teetered early September, Greenberg, who was ousted from AIG in 2005 amid an accounting scandal, emerged as a vociferously vocal defender of the insurance company he built from the 1960s into a massive empire, appearing on CNBC to argue that an AIG failure would present huge “systemic risks to the US and international financial systems”, and penning a comment piece in the FT, in which he said:
AIG. is not an ordinary company. It has opened markets all over the world and, for more than three decades, stood at the vanguard of the liberalisation of the global trade in services. Its stock is owned directly or indirectly by millions of Americans. And it has contributed significantly to US gross domestic product directly and indirectly over the four decades of its existence.
But all that is not why it should be saved. AIG. has a trillion dollars in assets. It can (and always has) serviced its debt. With the right leadership, it will continue to do so.
As DealBook noted on Sept 16, Greenberg and his lawyers formally asked if he could play a role in overhauling AIG. The deadpan response, according to a person close to the company, was: If you are willing to make a multibillion-dollar equity investment, we are happy to talk.
In a letter to AIG’s chairman and CEO and the AIG board, Greenberg reiterated his desire to assist the company in whatever way possible and berated the board for not accepting his offers of help.
But as DealBook reminds us, Greenberg, whose holdings in AIG were worth nearly $16bn at the start of the year, has seen the value of his holdings plummet – losing many billions of dollars as AIG shares have sunk.
Not least among those wondering how fond Greenberg still is of his old empire is one Robert Bolton, managing director for trading at Mendon Capital Advisors, who told Bloomberg on Thursday: “If I see my biggest advocate, and the guy with the most access out of shareholders, is essentially throwing in the towel, that’s not a good sign… People are reading the smoke signals, and if he’s willing to take three bucks, maybe we should take three bucks”.