The New York Times reported on its website that the plan being contemplated at Citi could pave the way for similar moves at other big banks. sourceThe plan involves changing the governments preferred Citi stock into common stock. So even though the government AKA U.S. taxpayer, will own a substantial part of the bank, it is not being viewed as nationalizing the bank, and therefor investors are pleased. Citi stock will be diluted but not wiped out and futures are up on the news.
Reuters: Stock futures point to rebound on Citi relief
The Wall Street Journal said the government, by converting a big chunk of the $45 billion of preferred shares it bought last year in an attempt to stabilize Citigroup, could end up owning as much as 40 percent of the bank's common equity.
1 comment:
Never had the pleasure of dealing with them myself. It looks like they are getting bailed out and its a done deal.
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