Here's my take on how the USG will play out the final 3.6B shares.
First - USG knows that while they are selling, it has a neg impact on Citi stock price...and they know everyone knows this. So Stock will go up till they would annouce next plan and then drop. They don't want to sell low.
They have a good example of AIG of what happens to a stock price in the hint of coming out of USG control.
So...how do they maximize their income for the final 3.6B? They put a "letter to the editor" in the Financial times saying their share sale is orderly and then say it could go into next year. No current institution wants that.
Now they are certainly getting inquires from institutions on buying the remaining shares. No one institution can own >5% (that was in agreement) but now with only 3.6B, they can magange this with just 2 or 3 institutions.
So they watch the stock go up in Oct...probably to 4.25ish...then they do the transactions with the 2-3 institution by the 20th...and annouce they have sold out.
USG out before Election day...Obama annouces success (just coincidental like Goldman/SEC thing). Citi happy, USG happy, institutions happy and shareholders happy. Shorts...maybe not so happy.
Citi is then free to buyback with excess capital.
Just my opinion on a possible scenario. Disclosure: I am long...obviously.
The reverse stock split should eventually happen. Right now they have 30B shares outstanding. If they eventually want to issue a dividend again are they going to have a dividend of $.10? It's extra work keeping track of who has how many shares. That also makes it very difficult to meet or beat EPS when the "S" of EPS is such a monster. We'll see what happens...but I do thing any bad news has been baked in. This stock and the rest of the financials should have a nice rise thru the end of the year (rotating sectors).
Hopefully your right but lessons I've learned leave me thinking your sceniro is half completed. The stock will go to $5 then stagnate for 6 mo Pandit will of had his fill sell his stock and retire right befor the rs.
I just read an article on why this wwon't stay at $5 if it hits it. The author made a point that Mutual Funds are dying to get into Citi but can't below $5. This thinks the 5's are just a brief stopping point.
An I don't think Pandit is interest in a small payday when he's got a shot to get this to $10 in a couple years.