The arrangement was for a set price, payable via part capital, part credit from JpMorgan. But Citi will reduce the outstanding shares to 21.5 billion by doing this, and will be ready to do a 2-1 reverse split, bring that down to 10.7b. They will announce a divident shortly thereafter, it is rumored.
And Citi doesn't need to pay a cent because they negotiated w/ the Treasury to use the $34billion tax credit as payment in lieu.
Everyone wins, right?
Time for the meds. Unfortunately Citi (even w/ the $82billion in cash) will be hamstrung until after teh economy stabilizes. It's fearful of a double dip (won't happen) and additional reserves when the housing prices drop again (won't happen as severely as people think). In fact in about 2 years time, people will look back at this point in time and see a world of 4%+ inflation, and Citi over $20 and think geez, we could have been there when the tide was turning.
But alas, we don't get the luxury of clear vision until after the storm is over and done with. And the opportunities are long gone.