AIG (AIG) Secondary Rumor Appears False, But Company Won't Comment

September 22, 2009 4:50 PM EDT

Today's late day selling pressure in the shares of bailed-out insurer American International Group (NYSE: AIG) is being attributed to rumors of a secondary stock offering.

When contacted about the rumors, an AIG spokesperson would not comment but quipped "this rumor was started by your own Jim Cramer." Well, for the record Cramer is from thestreet.com not StreetInsider.com! But anyway, the comments from the AIG spokesperson suggest that the secondary rumor is not true.

Can AIG even do a secondary stock offering without government approval? The AIG spokesperson did not know the answer of that question.

Well looking back at Cramers' comments, you will see that Cramer first started talking about a secondary at 1:11PM. Cramer basically said AIG should take advantage of the stock run-up by raising money in a stock offering. Yet, looking at the chart you will see that the big drop in the stock didn't happen until 3PM.

Is something else at play?

Reuters' Matthew Goldstein penned an even more interesting piece on AIG at around 3PM. Goldstein called for AIG to be broken up and questioned the motives of Representative Edolphus Towns in taking up the cause of former AIG CEO Hank Greenberg. If I were a speculator playing the AIG "game" I would be more worried about the Goldstein's comments than Cramers'. If the public outcry over AIG starts up again, maybe speculators will be left with nothing --- quickly.

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