Is citi (C) a buy or will it sink lower than $6.00
I is at $6.40/share
Answers
2222 points
readytoretire answered one year ago …
Citi is being hit by a lack of confidence and the market in general. They also took back some SIV at 17B, which some were viewing as negative. It is recovering some in after hours, but a loss of confidence can easily be the kiss of death. If it spreads, it will be sold within two weeks. A bunch of big name companies just invested in Citi in the last two months, so they may be able to keep it from vanishing.
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989 points
rvilmur answered one year ago …
C still has not revealed all of its bad paper; so right now there is no bottom. If things get bad enough, and this is one bank that will not be allowed to fail, the shareholders will get severely diluted when more capital is raised and/or the government buys a big chunk of the bank.
With that said there could be optimistic rallies. C is $5.37 now as I write so it is not happening today. If a rally does occur, it may be better to sell into it if you think that you can recognize the peak.
251 points
MichaelShulman answered one year ago …
"Obamanomics" might be providing a boost for now, but, in the end, foreclosures will continue apace, unemployment will climb relentlessly and the big banks, led by Citigroup, will need much more capital while still restricting lending.
By way of an answer to the question of "should we buy Citi now?" let me tell a little story:
I grew up in Long Beach, N.Y., and a body of water called Reynolds Channel, after the first mayor ever sent to prison for selling bonds based on false or misleading financial information, separated my town from the main body of Long Island. Full disclosure requires that I tell you it was a Democratic machine town.
I urge senior management at Citigroup to read up on Reynolds and his shenanigans. Citigroup is now touting its balance sheet, saying it is better than some of its competitors. Citigroup is deliberately ignoring more than $1.2 trillion in off-balance-sheet assets of unknown value and liquidity.
All the news for entire industry is unrelentingly bad, as defaults rise on mortgages, credit cards, auto loans, commercial loans and so on – and, with regard to Citi, the ONLY place to be is the short side.
