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george192002 09-15-2009 10:22 AM

Citigroup selling more FDIC-backed
9:22 AM ET 9/15/09 | Marketwatch

10:10 AM ET 9/15/09
Symbol Last % Chg
C 4.30 -4.87%
Real time quote.

NEW YORK (MarketWatch) -- Citigroup is selling more debt backed by the Federal Deposit Insurance Corp., Informa Global Markets said Tuesday. While the amount has not been determined, the bank is likely to sell 2-year and 3-year debt under the program that effectively lends financial institutions the government's AAA rating, allowing them to borrow at much cheaper rates than they would have paid amid the credit crisis. The deal is expected to price on Tuesday, according to Informa.

Im fairly new at trading and i was just wondering if someone could shed some light about C. I've heard some brokers talking about a target of $8 for C at the end of the year and i also seem to believe in "too big to fail". Based on that statement you could say that trades i make are pure speculation. I have no real basis. Please share some thoughts and outlook on C and if its not too much to ask, please include some charts and explanation to back your thoughts.

Im also in the process of learning about basic technical analysis, if you would be able to provide useful links it would be most appreciated.

Saintjames 09-15-2009 11:01 AM

Not sure why you got a thumbs down there, but here's a thumbs up. Thanks for the info.

Personally I am also bullish on C into the new year. $8 seems pretty reasonable by Jan. My questions is: is anyone buying at these prices around $4.25?

george192002 09-15-2009 11:07 AM

I forgot to disclose that i have C in my portfolio, i was in at 3.99 and 4.66. Thought that it would be smooth sailing, so i didnt sell when it was @ 5.2. I might buy more shares when it hits 4.2. Thats where i believe it will bounce back up, but i really dont have a basis for it. Its just pure gut feel. Will back my posts with charts though once i get a hang of technical analysis.

Saintjames 09-15-2009 03:51 PM

Should the Treasury sell Citigroup shares yet?
C is tanking right now on news of how the govt will begin selling back its 34% stake in the company, starting next month. If you loved her at $4.50 do you love her at $3.50?

Source: Should the Treasury sell Citigroup shares yet? (Dealscape - M&A)

Should the Treasury sell Citigroup shares yet?

Well, it looks like Treasury may not have to wait very long to sell off its 34% stake in Citigroup Inc. (NYSE:C).

Apparently Citigroup executives and members from Treasury are finally discussing how the government could/should sell the 7.7 billion shares of the stock it received last week, according to reports by Bloomberg and The Wall Street Journal. This is good news for Citi, which has been wanting to de-TARP, as Citi chairman Richard Parsons said Monday.

According to the reports, the Treasury may start unloading shares as soon as October and would gradually sell the holdings over the next six to eight months. Sound familiar? A commenter on our blogs last week left this thought to mull over:

The government will have to figure out a way to divest itself of C stock, for sure. They can't sell it all at once, they'll drop the share price.
Offloading 50 million shares a day for about 8 months should be sufficient to get rid of all their C stock while not wreaking havoc on the price.

The trick is the Treasury has to pull out of its stake without creating a run on Citi's stock. The plan is apparently either to sell the stake all at once in a managed offering or sell in a joint stock sale, in which Citigroup would issue $5 billion in new shares to help pay off the remaining bailout funds, while the government would simultaneously sell shares.

Last year Citigroup received $45 billion in bailout aid, and a sale of the common stock would leave the Treasury with a $27 billion investment, as Bloomberg points out.

So would selling all of its shares pay off TARP now? Since last week the government's shares have gained about $9.8 billion. Calculated Risk points out that it would still run short:

Bloomberg is reporting that the Treasury and Citigroup are discussing how the U.S. can sell the 34 percent stake (7.7 billion shares) that the U.S. acquired as part of the bailout. At $4.50 per share, the U.S. stake is worth almost $35 billion. In the February bailout, the U.S. increased it's common stake in Citi by converting $25 billion in preferred shares into common. And the U.S. is still also guaranteeing about $306 billion in assets (per the bailout agreement last November).

Well, if the government is not going to profit, why would it want to pull out now instead of selling Citi's shares next year? The bank's third-quarter earnings report is due in October and Citi has been selling some of its toxic assets, but still has plenty left on its plate. As Daily Finance's Douglas McIntyre points out: "The financial firm still faces write-offs in its consumer credit portfolio and commercial real estate mortgage business. Citi also carries toxic assets on its balance sheet that have never been sold. In other words, Citi's stock may not have a bright future."

If that's the case, it's probably better for the government to get out now, but that could also send Citi shares plummeting, and as we all know Citi is still "too-big-to-fail." So any sale exit by the government that doesn't leave Citi stable would see the government right back where it is now.

Additionally, not everyone thinks the government should pull out on its stake in the company yet. "For both Citi and the government to get out with credibility, they'll have to show at least a few quarters of decent results [and] be on a clear path toward consistent profitability," John McDonald, a banking analyst at Sanford C. Bernstein & Co. told The Wall Street Journal. So, in that case, maybe it's wiser for the government to wait for the shares to mature and Citi is on better footing? - Maria Woehr

george192002 09-15-2009 04:15 PM

Looks like C will be bleeding. T_T

andre3k1 09-15-2009 09:04 PM

is anyone looking at the longterm options for C?

im considering the Jan $5 calls which are going for .41 right now.

Thats seems really cheap to me. For some reason I have faith that this stock will grow more than that by then. That would be my first options trade though, so I am tentative.

longtrader782 09-16-2009 08:38 PM

Hey does anyone else think that the pullback in Citigroup represents a good buying opportunity?

andre3k1 09-16-2009 09:56 PM


Originally Posted by longtrader782 (Post 23855)
Hey does anyone else think that the pullback in Citigroup represents a good buying opportunity?

i'm in citigroup at 4.67.

I was considering picking up more shares yesterday at a sub 4.15 level, but I decided against it thinking there were better stocks to be played.

oh well, just my 2 cents.

Frederick 09-17-2009 02:27 AM

New price target (raised from $4 to $5)
BRIEF-RESEARCH ALERT-Analyst Bove raises Citigroup price target
Sept 17 (Reuters) - Citigroup Inc (NYSE: C - news) :

* Rochdale securities' richard bove raises Citigroup Inc price target to

$5 from $4; keeps neutral rating

* Analyst bove says does not appear that Citigroup is about to sell

common stock or government is about to make a huge offering

((Bangalore Equities Newsroom; +91 80 4135 5800; within U.S. +1 646 223 8780))

(For more news, please click here)


Copyright Thomson Reuters 2009. All rights reserved.

Citigroup's share price could rise to 5 !!IF!! as long as the US government does not shed its stake in the bank. Citi shares down on concerns of U.S. government sale - Yahoo! News

dxrules44 09-17-2009 05:10 AM

it does look like a good price to get into citigroup from considering the graph. i managed to get in to citigroup at around 2.50$ in march/april, !! too bad i only invested a small amount, lol looks like an opportunity to top up now though. i can see a slow painful recovery to around 20$ in the distant future

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