Citi (NYSE:C) down almost one-third in pre-market trading.
Posted on 02/27/2009 5:43:05 AM PST by rabscuttle385
BY KEVIN KINGSBURY AND MAYA JACKSON RANDALL
Struggling banking giant Citigroup Inc., moving aggressively to shore up its equity base, announced a stock swap Friday that if successful will leave the government owning more than a third of the company and wipe out nearly three-quarters of existing shareholders' stake.
The move is an acknowledgment that more than $50 billion in government capital and a backstop on more than $300 billion in troubled Citigroup assets haven't been enough to stop the bank's slide. It also represents a deepening of the government's role in trying to prop up the U.S. banking sector.
Under the deal, Citigroup said it will offer to convert nearly $27.5 billion in preferred stock sold to private investors and the public and up to $25 billion in preferred stock bought by the government into common stock. The exchange, if fully executed, would leave the U.S. government with 36% of the bank's shares. Existing shareholders' stake would be cut to 26%. Shareholders will have to approve much of the common stock issuance.
Additionally, the government is demanding that the company overhaul its board of directors. Citigroup's board will soon include a majority of new independent directors, the company said Friday. Chief Executive Vikram Pandit is expected to keep his job under the agreement.
The bank's stock plunged on the news.
(Excerpt) Read more at online.wsj.com ...
Citi (NYSE:C) down almost one-third in pre-market trading.
People scoffed when I said that this would be one of the government's objectives. I think they will also start replacing executives with their hand-picked personnel, too. This is nothing but expropriation under a different name - or, as Barry is fond of doing things, without naming it at all.
Whoa — Futures down 150 on obamanomics and nationalization of Citi. Shareholders = big losers.
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Typical Obama antics. Barry says he isn’t for nationalizing banks and makes sure the MSM says that.
Then he nationalizes a bank and changes the name to conversion, instead of nationalization.
He will do the same with the Fairness Doctrine, he says he opposes it, and that is what is reported. It will come back in bits and pieces and it will be under different names.
Obama is a 1st class liar.
You’re right and the spooky thing is that the sheep are lapping it up. He makes Clinton look like a amateur.
Maybe I should go watch “The Manchurian Candidate” again.
When the government sets the board of directors, that’s nationalized folks. Maybe they will put in a Fred Raines or a Jamie Gorelick type to solve the problems. They did such a fine job with Freddie and Fannie.
Add a few Acorn Members and we are in business.
Add a few Acorn Members and we are in business.
No surprise. CITI is one of the crookedest outfits that ever darkened America’s shores.
Fascism
A system of government marked by centralization of authority under a dictator, stringent socioeconomic controls, suppression of the opposition through terror and censorship, and typically a policy of belligerent nationalism and racism.
A political philosophy or movement based on or advocating such a system of government.
Oppressive, dictatorial control.
[Italian fascismo, from fascio, group, from Late Latin fascium, from Latin fascis, bundle.]
They will. Once the government starts replacing executives, you can bet it will be affirmative action all the way. Heck, the board will probably be ACORN members.
This is sort of like watching Hugo Chavez in English.
Stick a fork in Citi. They are DONE.
Oh boy. Now government workers will have bankers hours!
Rush said it yesterday: It wasn’t a budget, it was a coup.
Obama is pulling off the fastest transition to a totalitarian state ever known.
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