Citigroup Shares Climb 2.9% on News of Treasury Stock Sale (NYSE: C)

Shares of Citigroup (NYSE: C) rose 2.9% on Thursday following news that the U.S. Treasury was planning to begin selling its 27% stake in the New York-based financial company using a pre-set trading program, according to several sources.

The Treasury Department’s sale program would be similar to that of a 10b5-1 program, which is used by executives and directors of public companies to purchase and sell company shares at times which are pre-arranged without any potential risk of being accused of insider trading. Some believe that the plan could be announced as early as April.

A Bloomberg article commented that the Treasury Department would be able to “issue instructions on how many shares to sell, when to sell them and at what price, while eliminating concern that the sales are based on non-public information.”

The U.S. Treasury injected $45 billion into the bank at the end of 2008 as part of the Troubled Asset Relief Program. In December, Citigroup repaid $20 million of its TARP debt and terminated its loss sharing agreement with the U.S. Treasury on $300 billion of assets. The final step for Citigroup to get out of the federal dole is for the Treasury Department to divest itself of it 27% ownership stake in Citigroup.

Wall Street has been waiting for news as to when the U.S. government would begin selling its ownership stake in Citigroup, especially as a lock-up period ended on March 16^th which would allow the government to begin selling its shares.

Citigroup shares rose 12 cents for the day to close at $42.9. More than 971 million shares of Citigroup stock were traded throughout the day on Thursday.