The U.S. government may begin winding down its ownership in Citigroup (NYSE: C) after the company releases its first quarter earnings numbers on April 19th, according to a new report from the WSJ.
The U.S. government’s lock-up period ended on Tuesday, allowing the 27% stake that the Treasury Department owns in Citigroup to be sold. The government has not yet taken action to begin selling its billions of shares in the troubled financial company.
Citigroup shares rose on Tuesday despite the lock-up period ending.
According to the WSJ report, the U.S. government will likely not be able to sell shares of Citigroup until after the company reports its first quarter earnings on April 19th, because the government is currently considered an affiliate of Citigroup and likely is in possession of what would be considered material non-public information. If the government sold shares based on advanced negative information that it knew about Citigroup’s earnings results, it would be tantamount to insider trading.
Many believe that the government will wait until after Citigroup reports its first quarter earnings to begin selling shares. If Citi pre-announces its earnings, the sale process could begin sooner.
