Treasury could reap 40% profit in sale of some Citigroup stock

April 26, 2010 by · Leave a Comment
Filed under: Stock Market News 

Good to see the government unload their shares back to the private sector.  They did not really involve themselves much in management or compensation issues other than the general TARP mandate so this will take the overhang off the stock.  Citigroup is the posterboy for the “Too Big to Fail” Koolaid that everyone was drinking for the last 24 months.

This has got to stop and if any large bank commits such bad mistakes then they need to pay the ultimate price like any other company.  Until we understand that no matter what the cost, the long term cost will always be greater if we let bad companies stay in business and keep good companies prosper the lessening of competition as well as preventing new entrants from entering the field because of the embedded players.

This is at the very core of our problems in this country, we shun the dynamism that failure brings to our economy.  We want to support existing companies even when it does not make a business case for having them around.  This only helps our foreign competitors.  If we are using our resources to support failing companies then we are not letting those resources go to where the future jobs will be generate along with natural growth.

USA Today – The Treasury Department said Monday that its first sales of Citigroup stock (C) will cover up to 1.5 billion shares.

That would amount to about 20% of the 7.7 billion shares of Citigroup common stock the government owns.

It received the shares as compensation for the financial support it extended to the bank during the height of the financial crisis.

In a statement Monday, Treasury said it plans to proceed with the sales of the Citigroup common stock “in an orderly fashion under a pre-arranged trading plan with Morgan Stanley, Treasury’s sales agent.”  Treasury did not disclose in its brief announcement exactly when the stock sales would begin or how long the sales would last.


Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!