Q:
A: Only if you have some money sitting somewhere that you can afford to lose. The odds are probably against seeing it again. If you have read the loan agreement, the government is allowing AIG to borrow up to $85 bil if needed with the idea that AIG will sell off pieces of the company and use the proceeds to first pay back the government. The line of credit is to ensure that AIG can continue to operate and not have to sell off the pieces immediately, thus being better able to get top dollar. What may happen is that the profitable pieces go first and fast, then the less profitable and AIG will be left with the unprofitable pieces. The government obviously hopes that the sale of the profitable parts covers whatever part of the line of credit AIG needs to use. However, in case the balance on the LoC is not fully paid, the government owns 80% of all stock and will probably get paid first from the dregs. If anything is left at that point, any creditors will get their piece, then any preferred stock owners, then the remainder (not likely) to the common stock holders. If you want to take the chance that there will be something left over and that it will be enough to cover the cost for the shares, by all means, invest.