Brother, can you spare a share?
Some weeks ago, an employee of American International Group Inc, or AIG, pointed out dejectedly that a cup of coffee from a street vendor stationed near the company’s Pine Street headquarters would set you back about as much as an AIG share would. The now largely government-owned insurer’s stock was then trading in a range above a $1.25 a share.
Today, a cup of joe in Manhattan’s financial district would cost you more than the share with AIG’s stock trading in a range between 90 cents and $1.02. The same goes for several other stocks that were once among the big names trading at the nearby New York Stock Exchange.
Others in the under-$1 stock club are mortgage-lending firms Fannie Mae and Freddie Mac, who have more in common than steep stock market declines. Taxpayers have undertaken costly billion-dollar rescues for each, as soured mortgage investments drained away cash, in exchange for a 79.9 percent stake in the firms.
Fannie and Freddie shares are currently trading for 59 cents each, add in a share of AIG at 99 cents, and you have a grand total of $2.17 — a dime more and you could nearly buy a venti Starbucks coffee ($2.28).
Of course Starbucks itself has hardly been on a tear lately. Its shares cost the equivalent of just 5 of those coffees, compared with 10 about a year ago.
We’ll leave it up to you to figure out which purchase might be the biggest bargain. If you pick the coffee, sip and ponder what nationalization might do for other firms beleaguered by the credit crisis.
Photo: Reuters Pictures, a fake euro and U.S. dollar decorate a trader’s desk in Germany.