Citigroup Stock Costs Less Than Their ATM Fee
Friday, February 27, 2009 15:52
Citi Shares Drop Below Their $1.50 ATM Fee
Last week, we warned that Citigroup and Bank of America would most likely be taken over by the US government within 60 days. Our prediction proved to be optimistic by 58 days, in Citi’s case.
Last Friday, amid growing “rumors” and in an effort to calm investor fears, the Dow Jones news reported :
A source familiar with the situation says Citi isn’t in “any unusual discussions with the government.”
The “Calming” effect was short lived as two days later the news broke that Citi was indeed in talks with the US government in a deal which could result in a 40% stake in the failing bank. Today, the deal was finalized and the US government will convert it’s preferred shares into common. Dilution of common shares are expected to be as high as 75%.
Citigroup also announced a $10 billion 4th quarter loss and the suspension of dividend payments on common and preferred shares. The market reacted to the news by reducing the value of Citigroup shares by 40% as shares slid to a new all time low of $1.50. The selling continued into after hours and traded down to $1.41.
The shareholders have essentially been wiped out. Shares of Fannie Mae and Freddie Mac, AFTER being nationalized, have traded higher than Citigroup is now. Citigroup has been nationalized. The government is now the largest shareholder. I expect even the mainstream media will eventually start calling this what it truly is – A public takeover.
Next up: Bank of America. Stay tuned.
Related posts:
Rex84 says:
February 27th, 2009 at 11:30 pm
What goes around comes around! Karma Baby!
Citigroup Stock Costs Less Than Their ATM Fee | Charting Stocks | debt-web-guide says:
February 28th, 2009 at 10:06 am
[...] Read more: Citigroup Stock Costs Less Than Their ATM Fee | Charting Stocks [...]
Talkin’ About My Revolutions » CITIGROUP SHAREHOLDERS WIPED OUT says:
March 1st, 2009 at 11:40 pm
[...] The shareholders have essentially been wiped out. http://www.chartingstocks.net/2009/02/citigroup-stock-costs-less-than-their-atm-fee/ [...]
anonymous says:
March 5th, 2009 at 1:50 pm
What goes up, must come down. Citi is a GREEDY bank! (ex-enployee) What goes around, comes around.
Albert says:
March 6th, 2009 at 11:45 pm
Is it recomended to buy stock in citi group now?
chartingstocks1 says:
March 7th, 2009 at 7:40 am
Albert: we try not to give individual stock recommendations as we can not possibly know your investment objectives, risk tolerance, etc..
BUT…I’m sure you can find better places to put your money than bankrupt or insolvent companies.