US Treasury to dump Citi shares
Citigroup Inc. declined 3% to close at $4.18 Monday after the Treasury Department said it will begin to unwind its sizable stake in the banking giant this year.
The Treasury plans to sell 7.7 billion shares of Citi it owns as a result of the financial bailout over the course of 2010 subject to market conditions.
“Treasury intends to sell its Citigroup common shares into the market through various means in an orderly and measured fashion,” it said in a statement. Read more on Treasury selling Citi stake.
Treasury will initiate its disposal of the common shares pursuant to a “prearranged” written trading plan.
The statement didn’t elaborate on the plan, but the Treasury said the divestiture does not affect its holdings of Citigroup trust preferred securities or warrants for its common stock. See related story on Treasury’s Citi stake sale.
Analysts believe that Citi should be able to weather the sale without too much pressure, given its high turnover rate.
“While the thought of 7.7 billion shares hitting the open market is daunting, the relative impact of the U.S. government selling appears more manageable relative to Citi’s market liquidity,” wrote Jeff Harte, a bank analyst at Sandler O’Neill, in a recent note to investors.
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if that isnt a warning sign then i have never seen one..why would you get out if you thought the price was going to go higher?..are they that desperate for the cash?..i dont think so..i think they are jumping ship..
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