Citi stock price

Heard an analyst on CNBC say that C is a busted stock and that it is virtually worthless now trading around a $1. It will basically take too long to make back your money.
U.S. government to own up to 36% of Citi
Plans to convert preferred shares, reconstitute board; investors sell stock
By MarketWatch
Last update: 4:57 p.m. EST Feb. 27, 2009Comments: 2007NEW YORK (MarketWatch) -- The federal government tightened its grip Friday on a battered Citigroup Inc., agreeing to convert its preferred shares into common stock and boosting its direct ownership in the nation's once-largest bank to 36%.
The move, which will also install three new directors, presumably aligned with the government's interest in mind, sent Citi shares down more than 30% as the firm also reported another $10 billion in fourth-quarter losses and said it will suspend common- and preferred-stock dividends.
Citi's shares closed off 39% to $1.50.
The shares had fallen as much as 50% before the bell.
The plan marks the government's third attempt in recent months to right the ship at Citi (C:Citigroup Inc
News , chart , profile , more
Last: 1.50-1.05-41.18%

4:02pm 02/27/2009

Delayed quote dataAdd to portfolio
Analyst
Create alert Insider
Discuss
Financials
Sponsored by:
C 1.50, -1.05, -41.2%) , which has been buffeted by bad risk management and huge investment losses.
"What we announced today was not an easy decision for us because we understand the impact of the dilution we are asking you to bear, but in the end, our business is about confidence," said Chief Executive Vikram Pandit on a conference call with investors and analysts Friday morning.
"As a matter of fact," he added, "the entire financial system depends on confidence, and we wanted to take definitive steps to put all capital issues aside."
The move actually leaves the government with a slightly smaller stake than the market had expected, and a bigger stake in other preferred shareholders' hands -- easing at least slightly fears that the bank would be fully nationalized.
"Of course, the government holds a significant amount of common-stock investment in us, but our commitment we have had to every shareholder, which is to provide an exceptional return as we get through this cycle, remains unchanged. And in many ways for those people who have a concern about nationalization, this announcement should put those concerns to rest," Pandit said.
Diluting common equity by 74%
The company said it would issue common stock in exchange for preferred securities, which will increase substantially its tangible common equity, or TCE, without any additional U.S. government investment.
The Treasury said it will convert up to $25 billion of preferred stock issued under its Capital Purchase Program.
Video: Hot Stocks Report: Financials
Bank stocks are back in the market's crosshairs Friday, as the government agrees to boost its stake in Citigroup. MarketWatch's Greg Morcroft reports. (Feb. 27)Private investors also will take part in the conversion of preferreds, and Citi said Government of Singapore Investment Corp., Capital Research Global Investors, Capital World Investors and other major investors have said they will participate in the exchange.
"While we anticipated the government's stake increasing to at least 35%, the privately and publicly held conversion will dilute shareholders more than anticipated," Morningstar analyst Jaime Peters said Friday.
The move will cut current shareholder's stake in the firm to 26%.
"This securities exchange has one goal -- to increase our tangible common equity," Pandit commented.
TCE as touchstone
TCE capital is a measure of the value of a company's common shares, while Tier 1 capital, a more traditional measure, includes common shares, preferred shares and sometimes deferred tax assets.
As the credit crisis has taken hold, TCE has become a touchstone for the market, and been adopted as a more reliable measure of strength.