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Sunday, November 8, 
8:22 am

AIG's penny stock status to return?

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American International Group Inc. (NYSE:AIG) could be making its way back into the penny stock range as its shares sunk 36 cents or 22.22% on Friday to close at $1.26 per share. If Uncle Sam, which has warrants to be about 78% of AIG's shares, was a smart investor, it would be doing everything in its power to boost the ailing insurer's value. However, the House of Representatives on Thursday voted to impose a 90% tax on the payouts by AIG and other companies that get large amounts of taxpayer rescue funds. According to reports, some analysts said this type of legislation could destroy the competitiveness of the very financial institutions they are trying to rescue.

Goldman Sachs Group Inc. (NYSE:GS), whose collateral calls on its trades with AIG in collateralized debt obligations helped contribute to the insurer's downfall, slipped $1.98 or 1.99% on Thursday to close at $97.32. Goldman hosted a conference call Thursday explaining its AIG relationship and attempting to remove itself from any blame for AIG's demise.

Among deal stocks, Avigen Inc. (NASDAQ:AVGN) was a big winner with an 8 cent or 7.48% increase to close at $1.15 per share on news that BVF Acquisition LLC, an affiliate of Biotechnology Value Fund LP, Friday that it is increasing its cash tender offer for the biotech company to $1.20 per share from $1.00 per share.

The Dow Jones Industrial Average finished Friday down 122.42 to close at 7,278.38. - Michael Rudnick

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