What is AIG.WS?

[MaxPowers]

I looked at my brokerage account today and the first thing that caught my eye was AIG had gone down, alot. Google finance shows they paid a 0c dividend too. And, now I have 8 shares of AIG.ws that came out of nowhere. They are worth nothing, they are just there. So what happened to AIG and what is AIG.WS?

[jpg7n16]

AIG ticker is alive and well: AIG: Summary for American International Group, I- Yahoo! Finance

AIG.WS is the symbol for the newly issued Warrants as part of the company's recapitalization

American International Group, Inc. | Newsroom

from: American International Group, Inc. | Newsroom

Trading on the NYSE. AIG has applied to have the Warrants listed on the New York Stock Exchange under the ticker symbol "AIG WS" and anticipates that the Warrants will begin trading on the NYSE on a "when issued" basis on or around January 13, 2011. AIG has been advised by the NYSE that the ex-dividend date for the AIG common stock will be delayed through the use of "due bills," such that AIG common stock will begin trading in a regular way, ex-dividend, on January 20, 2011, the date following the anticipated issuance of the Warrants. Due bills are essentially an assignment from a seller of common stock to a buyer of the right to receive the dividend if the condition to the dividend is satisfied. If the condition is not satisfied, the due bills will be immediately cancelled and no Warrants will be issued

Oh and they're not worthless. They should be worth around $15.50 each: American International Group Inc. (AIG.WS.W) Stock Quote - InvestorPoint.com

[PRICEPLUS]

Thank you for the heads up!

[Bolero]

What can be done with these?
Do they behave and traded as a regular stock?

Thx

[jpg7n16]

What can be done with these?
Do they behave and traded as a regular stock?

Thx

They behave much more like really really long term options.

Strike price: $45 (according to A.I.G.'s Stock Price Falls on Issue of Warrants - NYTimes.com )
Expiration date: Jan 19, 2021

You can find current pricing information on the warrants through Nasdaq here: AIG.WS stock quote - American International Group, Inc. stock price - NASDAQ.com


From what I was able to locate, they allow the holder to purchase shares of AIG stock at $45 any time between now and Jan 19, 2021. So you have 10 years to purchase AIG shares at $45.

Since the current stock price is $41.69 (American International Group, Inc.: NYSE:AIG quotes & news - Google Finance ) it wouldn't be wise to purchase shares today at $45. But if 10 years from now, AIG is trading for $100. You could buy at $45 and sell at $100 for a profit of $55.

So your options with the warrants are:

1. Hold and exercise later when/if AIG's price is over $45
2. Sell the warrant for whatever you can get for it (today's price was $15.20)
3. Gift the warrant to someone else

[gimpy]

My question is: How do these warrants work?

For example: If I want to buy 100 shares of AIG, am I required to have 100 shares of AIG.ws, or how does that work?

Thanks.

[jpg7n16]

My question is: How do these warrants work?

For example: If I want to buy 100 shares of AIG, am I required to have 100 shares of AIG.ws, or how does that work?

Thanks.

Warrants work just like options. They allow the holder of the warrant the option to buy shares of another security within a certain timeframe at a certain price, regardless of the actual price of that security. The holder has an option, not a requirement to buy at that price. If you are not familiar with how options work, you should prob just stay away. They are very risky and speculative investments.

For instance, on this issue, each warrant gives the holder the option to purchase a share of AIG for $45. You simply compare that optional price vs the current actual price to determine which is better. If AIG was trading for $100/share, would you rather pay $100 or $45? $45 is a much better deal, so you could exercise your warrant and purchase shares at $45 each. On the other hand, if AIG was trading for $40/share, would you rather pay $40 or $45? Well $40 is better in this case, so you wouldn't want to exercise your warrant and pay $45 each, but just purchase in the market for $40 each.

AIG closed Friday at $34.80
AIG American International Group Inc XNYS:AIG Stock Quote Price News

Since the warrants allow you to buy shares of AIG for $45 each, at today's price it would be better to just purchase shares in the open market at $34.80 and leave the warrants alone. You'd save $10.20/share. On 100 shares, that's $1,020.

So if you want to buy 100 shares of AIG, you should just buy the shares on the market. The stock still trades like a normal stock. Just call your brokerage firm or log in to their website, and place the order.

If you don't know what the types of orders are: Orders