Tuesday, December 7, 2010

Citigroup Up 3% on News U.S. Treasury has Sold Remaining Stock (C)

In Pre-market trade the stock is changing hands at $3.58 up 3.03%.
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Bloomberg has the best overview:

The U.S. Treasury Department sold its remaining stock in Citigroup Inc. for $10.5 billion, bringing the country’s third-biggest bank a step closer to independence from the government following a $45 billion bailout in 2008.

The Treasury said it disposed of 2.4 billion shares at $4.35 each, compared with yesterday’s closing price of $4.45 on the New York Stock Exchange. The sale raises the profit for taxpayers on the rescue to about $12 billion, including the share gain, dividends and proceeds from other securities.

The sale helps Citigroup exit the 2008 bailout, which was provided to keep the New York-based bank from collapsing as its stock sank below $5 and some depositors started withdrawing their money. Citigroup also had to get $301 billion of government guarantees on its riskiest assets, making the bailout the biggest among U.S. banks.

“We’re seeing a form of governmental handcuffs being released,” Bill Bradway, founder of banking consultant Bradway Research LLC in Framingham, Massachusetts, said before the announcement. “Citi will be basically disentangling itself from direct ownership from the government, and the government is cashing out.”...MORE