"Currently the U.S. Treasury owns a $45 billion stake of preferred shares in Citibank. The Treasury Department picked up its partial ownership of Citibank as part of Citibank’s bailout in the Troubled Asset Relief Program. The government has also agreed to share losses with Citibank on $301 billion worth of troubled assets," http://bit.ly/9e18ht by American Banking News. (twitter: http://twitter.com/AmericanBanking)
Everytime Government is involved in any public companies, it tries to focus on paying the debt instead of boosting the retained earnings for shareholders.
But for Citi's case, it is quite different. As Government is backing the bank with taking the 50% of burden off, Citi cannot collapse any lower.
-Technical Analysis-
It has constantly showed the prop around $3.50/share and it will rise higher toward $4.00.
It may have some resistance around $4.00 but if it passes 4.20, Citigroup will very likely to reach 4.80.
-Competitors-
Bank of America and Wells Fargo have almost double of Citygroup's market cap. (BAC: 165B vs. C:95B as of today, March 5th 2010)
It's not that BAC's EPS is higher than Citygroup, but its cash flow is much better than Citi's.
Since $C's institutional ownership is ~35% (1/2 of BAC's) it will most likely fluctuate a lot by small investor's move, who are very subjective to news.
So stay on your feet and be patient. The day of Citygroup reaching 4.20 will come.
I just hope it comes to us soon.
