What if I don't have enough shares for AIG reverse stock split?

In general, in a reverse stock split one of three things can happen to partial shares:

1) Partial shares are issued.

2) Partial shares are rounded up to the nearest whole number

3) Partial shares are cashed out.

I honestly did not know what would happen to AIG (apparently Etrade just guessed), but here is the story:

"No fractional shares of AIG Common Stock will be issued as a result of the reverse stock split. Shareholders otherwise entitled to receive fractional shares will be entitled to receive cash"

You will be cashed out based on Wednesday's closing price and will receive $93.30 (this is according to AIG).

1

inventory splits in many circumstances propose no longer something. opposite splits on penny shares won't be a stable omen. (If "C" opposite splits which would be seen a stable situation... like AIG). tries to maintain a inventory listed..... in many circumstances bring about extra desirable degradation of the fee. AIG is/became no longer a common penny inventory. do no longer seem to it as an occasion.

How did Robert M get to be top contributor with an answer like that?

The answer is completely incorrect.

You will not be getting any cash. The only thing you'll be getting is a currently 21% decrease in the value of your stock.

As of Intraday trading 07-01-2009, 3:24EST, AIG down 21.77%

"AIG shares tumble after 1-for-20 reverse split"

http://in.reuters.com/article/marketsNewsUS/idINN0...

"AIG reverse stock split fails to boost shares"

http://in.reuters.com/article/bankingfinancial-SP/...

This was another dumb move by AIG (aka US gov) who controls 79% of AIG.

Stock splits by themselves do NOT, do NOT do NOT increase nor decrease the value of the stock.

http://www.sec.gov/answers/stocksplit.htm

example:

2-1 split.

own 100 shares @ $100.00 = $10,000

Post split: own 200 shares at @ $50.00 = $10,000

The value of the stock is unchanged as a result of any split.

1-20 Reverse Split:

own 200 shares @ $ 1.00 = $200.00

Post split: own 10 shares @ $20.00 = $200.00

Again, the value of the stock is unchanged as a result of any split.

The reason for the split is also subject to price movement.

In this case some idiot(s) at AIG et al thought that if they just reverse split the worthless AIG stock, that investors might be fooled into thinking it is worth more than it actually is.

TRUTH:

See SEC.gov link about stock splits.

All AIG accomplished is making it easier for short sellers to re short the stock now that it is artificially (via the reverse split) over $5.00/ share.

And that is why it is down 20% today.

I have repeated stated over some time to AVOID AIG. It's a loser.

"...the company's (AIG's) nearly $100 billion in losses last year and a taxpayer bailout that left the U.S. government owning a nearly 80 percent stake in the company."

http://in.reuters.com/article/bankingfinancial-SP/...

02-24-2009

"AIG: The bailout that won't quit" ($152 Billion in bailout)"

http://money.cnn.com/2009/02/24/news/companies/aig...

4 months ago

"AIG obtain a new 30 billion dollar deal from US with plan to forgive some loans. What will it close at Monday?"

http://answers.yahoo.com/question/index;_ylt=AhYpa...

Was short AIG in 2008. Long been out of this dog.

Why would anyone want to buy 1 shares of a worthless stock? I think that is 1 share too many.

My guess is that the same people buying AIG are the same people buying GM, FNM, FRE.

I would avoid any government controlled "public" company. The smart money is out of these stocks.

Good Luck!

<07-01-2009>

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edit 2:

MSC is also incorrect.

A broker will NOT, will NOT; will NOT sell your shares for ANY reason except for a margin call without your authorization.

If a broker sold shares without your consent that would be "unauthorized trading" and the broker could be subject to litigation risks.

"Unauthorized transactions are trades your broker makes in your account without your permission or authorization. But if you have a margin account and the value of the account falls below your firm's requirements, your broker may be able to sell your securities without consulting you first."

http://www.sec.gov/answers/unauthtransact.htm

Since this does not appear to be a margin question, your broker cannot sell any fractional shares without your consent.

I'm gone from Y!A for less than a week, and look what happens :P

Kids, time to clean the house.... lol....

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edit 3:

Sorry to report, "Bull Market" poster is also an incorrect answer.

This is part of the problem people will have seeking non-professionals, or non-experts or from those who are unfamiliar with securities rules and procedures answering questions like these.

The thumbs dn on my post is likely from those with incorrect answers. You should know the correct answer and not be mislead by contrary information.

It is also useful for those defending an argument to cite sources to support any contra argument. Notice the other posts have no cited sources to support their claims.

FYI: If you have any further questions, you can call FINRA (Financial Industry Regulatory Authority) directly at:

(301) 590-6500

http://www.finra.org/Investors/Contacts/index.htm

Ask Scottrade, but they have to either cash you out, or give you fractional shares.

CORRECT ANSWER: I just called E-Trade, and they said that depending on how the split is set up, the company will either give you fractional shares, or pay you cash for the fractional shares that they owe you.

you'll get cash for partial shares, in your case less than one share, you'll get cashed out, without even paying a commission!

you'll get partial.

thanks for all the answers!