Treasury Headed for Underwhelming AIG Sale

The Treasury has decided to go through with a plan to sell 300 million AIG shares, despite recent blows to the nationalized insurer’s market price, sources tell the Wall Street Journal. Given the sagging demand, the government expects to make around $9 billion in the small offering, which is on the low end of the $7 billion to $25 billion it had hoped for.

That bodes poorly for taxpayers’ ability to make a profit on the AIG bailout—it’s still possible, but will rely on more impressive sales in the future. After its shareholder meeting today, the company will embark on a “road show” to promote the stock, and based on the response could expand the sale, or cancel it entirely. If the sale price gets too low, “it’s possible both Treasury and the company will say, ‘Forget it,’” says one person familiar with the plans. (More AIG stories.)