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Citigroup Inc. Message Board

  • dan_xia dan_xia Aug 1, 2009 10:39 AM Flag

    NO Fear for RS_Why

    The fact is now Citi does not consider a RS ("it is put on back burner." - from last annual meeting)

    So, why not just buy and hold C for at least the foreseeable future before a RS if any - who expects PPS will be below $3 in current conditions?

    The fact is that any public traded company will consider a RS if it is considered "good" in overall for the company's own health and development, and Citi is not an exception. In addition, since AIG's example is still fresh, and the economy is just about to or might start solid recoveing, how stupid would Citi consider it now.

    The fact is that even Citi eventually has to do a RS for the reasons listed in any financial textbook. It will turn out either nothing to be worried about if the overall economy has improved significantly and if Citi starts making profit and has a strong outlook, or at least the whole RS preparatory process will give you, retail investors adequate time to retreat or stay on in course (To do a RS, it has to be first discuss it, vote for and pass it, and set a time for actually implementing it).

    So, the fact is that if Citi does want to do a RS in the future, you as retail investors who hold from dozens of shares up to a hundred of thousand shares or so) will have adequate time to resolve the issue for your own interests based on your best knowledge (as compared to the institutional investors, for them it is much difficult to act).

    An before any major dump, the institutions will first ratch up the PPS, which has been always the case which will give you a plenty of opportunity of selling your shares.

    At this jucture, I just do not see any reasons of not holding or buying some and holding C now.

    Disclaimer: I personally hold 30K at average cost of $3.06

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