AIG, a company infamous in this recession, has announced a 20-for-1 reverse stock split. This means investors who had 20 shares will now own 1 share. I am not sure what happens if you owned less than 20 shares but perhaps you receive a cash payment and are forced out?

Not sure what the logic is exactly so I’m just pontificating. My guess is that they believe they can easily pump up the share price from $1 to nearly $20. That will give the stock some breathing room for the deadly $0 share price. Currently the new valuation has dropped 21% to settle near $18.30. Perhaps this will give AIG some breathing room which maybe a key to getting us out of this recession. The financial industry lead us here but hopefully they can help get us out of this hole as well.

This article caught my attention as I scanned through business news looking for new layoffs and economic data. New posts coming shortly, I promise.