The investor admitted he misjudged the government's intentions with the insurer. What does that mean for Berkowitz's giant stake?
FORTUNE -- With AIG (AIG, Financial) stock cratering nearly 50% this year, all eyes have turned to investor Bruce Berkowitz, AIG's largest private shareholder. The 52-year-old fund manager looked especially smart last year while amassing 40 million shares of the insurance giant. Back then, AIG shares were skyrocketing and embarrassing hedge fund managers like Steve Eisman who were betting on the stock's collapse.
It became apparent last year that the government would begin unloading its stake in the first half of 2011. But at the end of 2010, when AIG shares traded above $50, it looked as if the sale would produce a tidy profit. Berkowitz said as much in a December Q&A with Fortune:
The government had a pretty good record selling its shares in Citi (C, Financial) without hurting the stock price. Do you think that will happen with AIG?
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