The only issue I have with the logic behind the article is that the government wouldn't allow Citi to buy their shares as Citi wanted to and forced Citi's hand in issuing additional shares to raise the money for the TARP repayment.
If the lockdown was to allow Citi to buyback the gov't shares, why would they not just allow Citi to buyback the shares at the time? For appearances to the public that they were forcing Citi to be a stronger company with more cash on hand?
It was always the plan for C to buy back Govt diluted shares, who knows maybe CB is right and C is holding on to the 3.3 bil from underwriting. That equals 11b shares that could be bought at about this price range
Since then they sold 10b more in assets, and maybe they will get 1 bil for the trading unit with 10b in assets.
When C did conversion, not only did they convert Govt to common, but just about all prefered's. Savings about 2 bil a year. Now they are rolling over 30bil less in debt, most likely a savings of another 2 bil.
At some point, C will raise a gazillion dollars by issuing preferred stock again.