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Treasury Department Looking At Selling Citigroup (NYSE:C) in Blocks


Friday, March 26th, 2010

Many investors and shareholders in Citigroup (NYSE:C) have been concerned over how the Treasury Department was going to divest its 27 percent stake in the company. To ease those worries the Treasury is exploring the idea of selling their shares on a regular scheduled basis.

What made investors and shareholders uneasy was the possibility of the government selling its shares in a huge block sale which would have diluted the shares as they sold at a discount to the market price.

The government owns about 7.7 billion shares in Citigroup which they acquired in order to keep the company from collapsing during the worst part of the economic crisis.

The Treasury also owned another $5.3 billion in trust-preferred securities and warrants which would have bought 465.1 million shares at the end of December.

Even though Citigroup has had a decent March, they would probably have an even better time for the share price of their stock once the government sells its stake in the company. Most believe the government is holding back Citigroup and has too much control over what it can or cannot do in its business.

Once the Treasury does start selling its stake, it at minimum will give them a temporary boost, and if they can get their fundamentals straightened out, Citigroup could be a good stock to own over the long term, with a lot of upside potential.



Article by Gary B

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



Tags: citigroup , shares , treasury department