Are AIG's shares worthless?

AIG (AIG) still has a market cap of $1.8 billion. It used to be over 100 times that. But investors are still willing to gamble that at $13.10 (its price after a reverse split) AIG's shares could run up. The argument for an improving valuation of the stock is that the insurance company is finally having some success selling assets or monetizing them through other means, like an IPO of one of the firm's units.

A Citigroup analyst says that investors are not looking at the fact that all the money AIG will collect as it effectively liquidates the company will go to the federal government to pay back loans. According toBloomberg, "Our valuation includes a 70 percent chance that the equity at AIG is zero," said Joshua Shanker, an analyst at Citigroup." Maybe.