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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Citigroup Stock Sinks to $1 Per Share

Shares of troubled Citigroup have been sinking steadily for months, but today they crossed a symbolic barrier: they fell below $1 per share.

This is a breathtaking destruction of value for a bank that was once the world's largest.

Shares of Citigroup stock peaked in 2006 at $55.70, which gave the company a market capitalization (price of stock times number of outstanding shares), or value, of $277.2 billion.

Today, Citigroup's market cap is $5 billion.

But keep in mind that the federal government has already plowed $45 billion into Citigroup, which means the company is worth far less than the actual amount of cash it has received. Astounding.

The bank has become a black hole. Cash goes in and never comes out.

Citigroup and Bank of America are deemed by most analysts as being the sickest of the big banks -- the ones whose balance sheets are most poisoned by toxic assets.

-- Frank Ahrens
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By Frank Ahrens  |  March 5, 2009; 12:26 PM ET
Categories:  The Ticker  | Tags: Bank of America, Citigroup  
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Comments

What should I do with my Citi savings account? I know it's supposed to be insured by the government, but I read a few days ago that the FDIC is running out of cash. So, if Citi collapses, how do I get my money back? It's terrifying!!!

Posted by: tropicalfolk | March 5, 2009 2:32 PM | Report abuse

so for $45 billion, the FedGov got 36% of a company worth $5 billion? that's 9X's the total cost for less than 2/5th's the ownership. and Bernanke and Geithner can sit there in front of Congress and have the balls to claim the taxpayer will make money?! i got news for anyone that hasn't been keeping up with current events. the financial system HAS ALREADY collapsed. what we're witnessing is the final round of looting by bankers and politicians.

Posted by: millionea7 | March 5, 2009 2:59 PM | Report abuse

So should I buy more shares or burn the ones I own for firewood?

Posted by: postfan1 | March 5, 2009 3:39 PM | Report abuse

THE TREASURY GAVE CITI BANK $ 80 BILLIONS FOR A 36% OWNERSHIP IN A COMPANY THAT IS WORTH LESS THAN $ 6 BILLIONS ? THIS IS EXTREME RECKLESS 101 ECONOMICS.

Posted by: mtavro | March 5, 2009 3:45 PM | Report abuse

Since Obama won the election, Americans have lost more than 3 trillion dollar in their stock investment and the world population has lost 9 trillion dollar so far. It will be impossible for Obama to correct the loss in a short time. He must stop spending a single dollar without any sensible outcome. He should keep in mind that Americans have loss their savings/investment and they do deserve government help. To start with he should raise the investment loss deduction of $3000 to a minimum of $15,000. And, rather than tax cuts and other gimmicks, he should distribute coupon book of many items starting with groceries to cars and homes with 20-30% government help.China did it and having better results than us, why we cannot do it?

Posted by: citysoilverizonnet | March 5, 2009 3:53 PM | Report abuse

Geithner needs to nationalize Citigroup and if he won't do it then Obama needs to fire Geithner. Once nationalized, Citi should be broken up, the good components IPOd, the mediocre components salvaged, and the bad components destroyed. Ditto Bank of America. Ditto GM. It's time to clear the detritus.

Posted by: mbmclaughlin | March 5, 2009 4:06 PM | Report abuse

I wish the media would stop lumping other banks in with Citigroup when they write their stories. There is no other bank out there that compares to Citi. the media hype creates market fears about the solvency of these companies. It is both irrational and irresponsible to lump them together. If you do lump them, include Wells Fargo, JP Morgan Chase, etc. Stop including a single bank like Bank of America when that particular bank is head and shoulders more solvent than Citi. Bank of America is simply being "punished" for acquiring Merrill Lynch. Now cut it out and write intelligent stories. Bryon Fessler , Irving Texas.

Posted by: BryonFessler | March 5, 2009 4:50 PM | Report abuse

We paid too much for the Citigroup and GM stock we bought; Our kids, and grandkids will be using it for wallpaper.

Posted by: buzzm11 | March 5, 2009 5:13 PM | Report abuse

Bigger they are, harder they fall - and fall Citigroup must.

Posted by: TalkingHead1 | March 5, 2009 5:36 PM | Report abuse

If you have it, a $1000 on Citi is not a bad buy. I dont think think the Govt will let them fail, they are too big, and yes $1000 is a lot of money but they usually trade around $20. That's not a bad return IF they dont fail.

Posted by: dbeins | March 5, 2009 6:32 PM | Report abuse

The old system of crooked capitalism is as dead as a doornail.The government must not spend billions propping up "buggy whip makers".A new era awaits us all.Lets shead our fear and embrace it.For there is no other alternative now.

Posted by: jellyhouse56 | March 5, 2009 8:08 PM | Report abuse

Well, Citi is "already gone", has been for years, started when it was bought by an Insurance company, Insurance is not banking, but hey, Government is not banking either ... so guess what, Citi would be seized by now if the FEDs thought for a minute they could run the behemoth. They know better, and think it thru, who do you sell it to? BofA? IT IS ABOUT THE PAYMENTS SYSTEM!, U wanna fly from DC to California to negotiate that check you got from, say, Cisco? U think the Federal Reserve can do it? Hah!

Posted by: PeterDinWC | March 5, 2009 8:19 PM | Report abuse

$45 billion for a $5 billion company. Can somebody explain how that will stimulate the economy, "unfreeze" the credit markets, or do anything that remotely resembles common sense? Citi is terminal. Hell you could have created another bank entirely with that kind of bailout.

Posted by: rjjrdq | March 7, 2009 12:02 AM | Report abuse

The comments to this entry are closed.

 
 
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