Posted on 11/20/2008 7:33:37 PM PST by TigerLikesRooster
Citi Weighs Its Options, Including Firm's Sale
By DAVID ENRICH
Executives at Citigroup Inc., faced with a plunging stock price, began weighing the possibility of auctioning off pieces of the financial giant or even selling the company outright, according to people familiar with the matter.
The internal discussions are at a preliminary stage and don't signal that Citigroup's board and management are backing down from their insistence that the New York company has ample capital, funding and strategic direction, these people said. But with the stock down another 26% Thursday, its worst one-day percentage decline ever, Citigroup officials have decided they need to reckon with a range of scenarios that were unthinkable only weeks ago
(Excerpt) Read more at online.wsj.com ...
Citigroup’s corporate management received billions from Big Banking benefactor Paulson. What management has done with their ‘free hand out’ nobody knows, yet they are issuing pink slips to at least 53000 employees (no CEO insiders need to worry).
The solution is to show a profit, proving that liquidity can be cashed in for earnings at will. In this market, that is easy. Citi can borrow at 1-3% rates from the Fed or one CDs from savers, and buy in its own debt in the secondary market at 10%. Anyone can doubt whether every other bond in existence will really pay the 10-15% rates currently on offer, I suppose, but Citi isn't going to default to itself. They've got something like $400 billion in treasuries that have flown to the moon, yielding next to nothing. Damn the risk measures and earn, if that is what people want.
Any thoughts on what option(s) is/are on the table at today’s emergency board meeting?
My broker team was with Smith Barney seven years til mid September, so about two years under Citi management. According to them, the question isn’t who buys Citi.
Citi demonstrably needs cash, and the only unencumbered asset worth much is Smith Barney, making the real question(s), “who wants Smith Barney, that can afford to buy Smith Barney?”
I wonder who's gonna get roasted after close of business.
GE
Good point.
CITI Bank use to be National City Bank of New York
Looks like Lehman Brothers had a substantial portion of their shares and that of the Fed Reserve.
Sandy Weill pushing out John Reid was a big mistake. Ditto with Jamie Dimon. Robert Rubin has made $20 million and year as co-chairman since Clintoon left office and we will keep hearing how smart he is. Watch Obama make him treasury secretary again.
Sandy Weill pushing out John Reid was a big mistake. Ditto with Jamie Dimon. Robert Rubin has made $20 million and year as co-chairman since Clintoon left office and we will keep hearing how smart he is. Watch Obama make him treasury secretary again.
Is there any movement on doing something about “mark-to-market” that contributes a lot to this mess and creates a higher volatility?
Somali Pirates in Discussions to Acquire Citigroup
2008-11-20 14:23:00.260 GMT By Andreas Hippin November 20 (Bloomberg)
The Somali pirates, renegade Somalis known for hijacking ships for ransom in the Gulf of Aden, are negotiating a purchase of Citigroup.
The pirates would buy Citigroup with new debt and their existing cash stockpiles, earned most recently from hijacking numerous ships, including most recently a $200 million Saudi Arabian oil tanker. The Somali pirates are offering up to $0.10 per share for Citigroup, pirate spokesman Sugule Ali said earlier today. The negotiations have entered the final stage, Ali said. “You may not like our price, but we are not in the business of paying for things. Be happy we are in the mood to offer the shareholders anything,” said Ali.
The pirates will finance part of the purchase by selling new Pirate Ransom Backed Securities. The PRBS’s are backed by the cash flows from future ransom payments from hijackings in the Gulf of Aden. Moody’s and S&P have already issued their top investment grade ratings for the PRBS’s.
Head pirate, Ubu Kalid Shandu, said “we need a bank so that we have a place to keep all of our ransom money. Thankfully, the dislocations in the capital markets has allowed us to purchase Citigroup at an attractive valuation and to take advantage of TARP capital to grow the business even faster.”
Shandu added, “We don’t call ourselves pirates. We are coastguards and this will just allow us to guard our coasts better.”
(Got this email at the start of trading today. Must I tag it as satire so as not to start a run on PRBS?)
“Who is going to buy Citi? “
With the stock price below $4 per share, we can probably run a bake sale here at FR and buy controlling interest :)
and how about the stock holders, f-em? some have alot of shares. and by the way, Smith Barney. Been spending a lot of money to lure brokers (MIllions) from the likes of Morgan Stanley. Who’s money? Our’s? Lots of questions to be asked.
Make up your bloody mind now. Wanting to murder bankers because they supposedly deserve it when their customers stiff them, means communism and the evaporation of private capital, or the completely absence of all services from capital. If you want services of capital, they need to be paid for, in full, and that means it must be possible for a private banker to make money owning bank stock.
If you continue insisting that the common is always slaughtered, the stock market goes straight to zero without pause.
Be clear about that, and decide now.
At around 12:00am FOX-News just announced that the Feds would be bailing them out.
http://www.foxbusiness.com/story/markets/report-citigroup-rescue-talks/
Didn't I heard this from someone last week and the week before and the week before...
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