Citigroup shares plunge 18% as board meets

Shares in Citigroup fell by nearly 18 per cent in early trading as the US bank called a board meeting to discuss its future stability, including whether to find a merger partner or sell-off some of its assets.The company, once America’s largest bank, saw its stock fall a further 18 per cent today, to $3.86, in early trading following a catastrophic week on the stock market which has seen the lender’s market value more than halve.The board may decide to sell parts of the bank or even the entire business, the Wall Street Journal reported, adding that Morgan Stanley, a rumoured partner, is not considering a bid.

Citigroup has insisted it has “a very strong capital and liquidity position and a unique global franchise”. Yesterday, Saudi Prince Alwaleed bin Talal said the shares were “dramatically undervalued” and said he plans to increase his stake to 5 per cent, from less than 4 per cent.

But this failed to assuage concerns that Citigroup would need to raise fresh capital to staunch further losses. One analyst said: “Investors right now aren’t convinced that we’re done seeing dead bodies on the Citigroup balance sheet.”

The board, under chairman Win Bischoff and lead independent director Richard Parsons, will meet at Citigroup’s New York headquarters. There has been speculation that some insiders are unhappy about Mr Bischoff’s handling of the crisis and want him replaced by Mr Parsons, though this has been strongly denied by the bank.

Earlier this week, Citigroup announced 52,000 job losses around the world, with the City of London bearing much of the brunt. The bank refused to comment on today’s meeting.

Overall, the Dow Jones industrial average rose by 29.94 points to 7,582.23 after falling 444.99 to 7,552.29 yesterday. The S&P 500 index made a small 6.05 gain in early trading, to 758.5 after plunging to its lowest point since 1997 yesterday.

In London, the FTSE 100 ended the week at a five-year low after earlier gains were reversed.

The FTSE closed 2.4 per cent, or 94 points, lower at 3780.96.

Source

They received $25 billion from the US tax payers.

Of course this will spread around the world yet again. They are their own problem.

Unfortunately because of World Trade they are in many countries now.

Does anyone else have a problem with this?

Seems World Trade is also playing a great part in the World Financial Crisis.
What bailed-out banks spend on lobbying

US Banks Will be Begging at the Tax Payers Door Again Soon

Published in: on November 21, 2008 at 9:43 pm  Comments Off on Citigroup shares plunge 18% as board meets  
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