September 9, 2008: AIG Stocks Experience Steepest Fall Ever

Shares in the insurance giant AIG fall 19 percent to $18.37. This is the company’s worst day of trading ever, beating the previous record set only a few weeks ago (see August 7, 2008). [Bloomberg, 9/16/2008; Bloomberg, 3/5/2009] The fall is caused by the news that the Korea Development Bank has backed away from a deal to purchase the ailing bank Lehman Brothers (see September 9, 2008), as this causes investors to become nervous about AIG’s ability to raise capital. [Bloomberg, 9/16/2008]