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Citigroup Inc. Message Board

  • glass_haf_full glass_haf_full Oct 1, 2010 6:18 AM Flag

    Treasury - Final Step

    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. 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.

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