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Rating:Berkowitz Mans Up on AIG Not Rated 5.0 Email Routing List Email & Route  Print Print
Tuesday, May 10, 2011

Berkowitz Mans Up on AIG

News summary by MFWire's editors

Sometimes you have to know when to hold 'em and when to fold 'em. Evidently, Bruce Berkowitz of Fairholme Fund [see profile] has not found his game when it comes to his bet on AIG.

During a conference call with shareholders yesterday, which was picked up by The Wall Street Journal, Berkowitz confessed that he was wrong for holding on to the stake.

According to the pub, Berkowitz made his bets on the stock in Q1 2010, riding it from the $22-$34 range up toward $60. However, AIG shares are now trading around $30 a share and, according to FactSet data, Berkowitz purchased most of his shares when the stock was trading above $32.

"The government wants to sell 1.6 billion shares with their cost basis around $29 per share," Berkowitz was quoted by the WSJ as saying in the conference call with shareholders yesterday morning. "Well, I ask you, guess where the public offering will come, given the government is not in the business of making profits. My guess is around $27 to $29. You could ask, why do we hold? Well, I was wrong."  

Edited by: Hung Tran

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