Opinion: Citigroup (NYSE:C) Shares Continue to Rise
It’s fun watching the Citigroup (NYSE:C) shares rise, as it reminds you of people making huge investments based on nothing but the herd mentality, as Citigroup has nothing happening to it that justifies the stock being bid up like it is, but I know those moving in and out of the market are loving it.
Since the close at the end of last week at $3.50, Citigroup shares have rising as high as $4.07 a share, and may even rise more. Shares exchanging hands has been high as well, with close to 200 million in volume being registered early today.
What is all this about? Part of it was the comments made recently by a hedge fund manager and debt research company. CreditSights and hedge fund manager Bruce Berkowitz made positive comments about Citigroup and the stock started running since then.
The strong response to the $2 billion in trust-perferred securities could have had an ancillary effect as well. That’s understandable with the 8.875 percent interest being offered, although that was lowered for some to 8.50 percent.
Possibly the biggest influence on the stock share run-up was the news reports that the government may be finally ready to abandon the 25 percent stake it holds in Citigroup, and could offload their shares over the next three months. That, probably more than anything, is what has driven the stock price up.
The combination of factors has helped Citigroup get a nice short-term bump in price and distract investors and the public from the negative side of the fundamentals of the company, which are a long way from changing.
Even as I write Vikram Pandit is about to lay out in detail his strategy for Citigroup, with the idea most think to take the focus off the negative fundamentals of the company and transfer attention to where he wants to take the financial institution.
Pandit is expected to lay out growth projections for Citigroup today, and that could seal his fate one way or the other as to his keeping his job. As the numbers he throws out will be watched carefully, and if he’s overly optimistic he’ll be putting himself in a corner which he won’t be able to escape out of.
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Great post but complicated to understand since I am from Faroe islands ;-) 
What would be your top three tips for anyone new to this topic?
“It’s fund watching the Citigroup (NYSE:C) shares rise, as it reminds you of people making huge investments based on nothing but the herd mentality, as Citigroup has nothing happening to it that justifies the stock being bid up like it is, but I know those moving in and out of the market are loving it.
First, you really should proof read your posts unless something being “fund” is an investor's way of saying something is fun. Secondly, you might reason that what is happening is a re-correction to the C stock to be more in line with where it should have been over the past 6 months. Remember, this stock had feet in the mid-fours for months.
You guys who write on this board about C are way to obvious in your slant. This is not reporting but simply a bunch of wanna bes trying to affect the movement of a giant. Good luck, keep trying to kick against the goads.
“It’s fund watching the Citigroup (NYSE:C) shares rise, as it reminds you of people making huge investments based on nothing but the herd mentality, as Citigroup has nothing happening to it that justifies the stock being bid up like it is, but I know those moving in and out of the market are loving it.
First, you really should proof read your posts unless something being “fund” is an investor's way of saying something is fun. Secondly, you might reason that what is happening is a re-correction to the C stock to be more in line with where it should have been over the past 6 months. Remember, this stock had feet in the mid-fours for months.
You guys who write on this board about C are way to obvious in your slant. This is not reporting but simply a bunch of wanna bes trying to affect the movement of a giant. Good luck, keep trying to kick against the goads.
Are you going to stay as retarded or take some pills?
A worthless blog – you've got to re-think your ideas and your writing style…
This post makes a lot of sense to me. It seems a reasonable and balanced view. However, the shares continue to rise. I am looking for a correction
A LOT of people lost their short today…; the anger is understandable.
I believe a correction will come but not for the reasons you stated.
Citi share is rising because it proves to be “too big to fail” and the greed people have; just remember Citi was once a $50+ stock and right now is less than one tenth of its price, and did I mention that it looks like it can't fail.
Good luck all! XD
Warren Buffet does not buys Citi even at $1, so I guess Citi is just rubbish.
Nothing can justify the price action. It has more than 30b shares plus another 10b owned by the government. There will be a huge price drop when the government start selling.
If you really love the stock wait untill the government sells.
The better bank play is BAC which has only 20% of C shares and has better book value and earning potential.
Agreed. With the gov selling 30% stake=10 billion shares in open market in the next few weeks, the share will be forced lower.
Agreed. With the gov selling 30% stake=10 billion shares in open market in the next few weeks, the share will be forced lower.
Agreed. With the gov selling 30% stake=10 billion shares in open market in the next few weeks, the share will be forced lower.