CitiGroup Citibank BailOut Saved from Bankruptcy with $20 billion
Submitted by Godmode on Mon, 11/24/2008 - 12:08.
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The government's $20 billion of new capital comes on top of $25 billion it had put into the second-largest U.S. bank by assets. The government in return receive preferred shares with an 8 percent dividend in return.
Citigroup received the latest infusion after its shares plunged 60 percent last week to $3.77. There were strong rumours that Citibank will be bought over by Goldman Sachs or Morgan Stanley.
Due to the bailout, Citigroup's dividend will be completely wiped out. Investors will not receive a single cent now. The bank cannot pay out more than 1 cent per share per quarter over the next three years without government consent. The quarterly dividend is now 16 cents.
Citibank will now try to modify troubled mortgages in the $306 billion portfolio as the government tries to keep homeowners out of foreclosure.
Shrikant Pandit, CEO of Citigroup quoted post-bail out that Citibank is all set to reduce Citigroup's workforce to 300,000 by early next year from 375,000 at the end of 2007.
Citigroup's market value on Friday was just $20.5 billion, down from more than $270 billion two years ago -- and even below the $25 billion initial capital injection.
If you hold citibank shares in the market, they essential lost its charm. However this is probably not the right time to sell off citibank shares. Hold on to them untill 2010, you might recover more money. I see citibank in the range of $10-$12 by 2010.
Overall Citibak bailout is the biggest ever bailout in the american banking history. We really wish citibank never filed for
bankruptcy
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"What's in your wallet?"
guys good news, its already up to $6.XX as i type this. Hopefully goes to $10 by end of this week, then i will be selling this one off. Never know when citibank will come back to good old golden days.
Bye bye citibank.
Mike - Cali
Josh, prices might go up today. by the way, US govt given $20 billion but its not a loan they get shares for that price, so they are hoping to recover that money later when the stock rises to good level. Hopefully soon, I have over 20000 stocks of citibank and am screwed just like you. hope for the best
Christina
from Boston
citibank really sucks. God knows whats going to happen to my citibank stock. I will just take your advice and hold onto it. I hope to recover my money soon. Will the citibank stock go up today? any idea?
Josh - NJ
DIVI would ask the President to call me before he gives any money to Citibank, they are and practice unethical business. Their lawyers lied to the Department of Fair Employment and Housing, wrongfully terminated me while out on workers comp and all because I wanted to put my daughter first. Now Citibank ask for bail out money from our goverm=nment yet when I wrote to over 200 senators and government people I got no help. They broke California labor codes in the process of firing me, while I was ill. My attorney made over 200,000.00 and checks were sent out to about 2000 people. They want your help but no one would help me and all though they wrongfully terminated. There is greed at Citibank and they knowingly gave mortgages to people who didn't qualify by pumping up their income and now they want my tax dollars. My attorney said firing me cost them about 3.5 million and I don't feel they should get or deserve the bail out money. My story is on line, and President Bush's office never did reply and the people that did just kept passing the buck. Fell free to call me for more details 831-236-0112, or look at the case filed in Monterey Superior court. I lost everything because of them, bad manager Jeff Ursino and they didn't even follow their own firing Stratford, fired via UPS by Citibank DIVMy husband voted for you and had I voted I would have voted for you. I didn't vote because when I tried to get help from people I had voted for no one helped, they say to write your congressman for help and they don't help you, but Citibank asks for bail out money and they get help. where is the justice, what about me, Jeff the plumbers wife? Citibank made the list of the best 100 companies for working mothers to work at, yet they fired me for putting my daughter's needs first! Where is the justice? Why should we bail them out? DIVI prayed for you all day and watched on my TV, stunning, we are truly blessed to have you. My favorite photo/moment is the thumbs up by your beautiful daughter, which I am sure you also put her needs first. Thanks for caring about our country, God Bless you and your family, may he keep you safe and happy.
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