It was thought once the Treasury Department starting the process of selling shares in Citigroup (NYSE:C) it had a good chance of surging past the $5 mark on a sustainable basis, as the beginning of the removal of government control was looked at as a positive because of less interference and control of the company.
The one concern from the beginning was how the dilution of the stock would have an effect on the company, and it seems that’s being priced into the share price, which has been lingering just under $4.50 since the Treasury announcement they’re going to begin divesting of their shares and the quarterly report of Citigroup.
Investors and traders are looking at it from two points of view it seems, and that is pulling on the stock from two different directions, resulting in its level holding pattern for now.
There is also the uncertainty that Citigroup will be able to truly turn itself around any time soon and return to sustainable profitability.
One positive trend is the divesting of non-core and weaker assets which is streamlining the company in preparation for a more consistent earnings performance.
Working on that turnaround has given Citigroup bulls a reason to remain positive and continue to invest in the stock with expectations it will be successful.
For those that have followed Citigroup for some time, this is nothing new, as there’s been a battle between bears and bulls in the company for some time, and it seems at this time the bulls are having the best of it, and until the fallout from the Treasury sales are further along, that could remain the pattern.
