Comments on: Citigroup Arithmetic Explained

By: AIG hearing « Mostly Economics

AIG hearing « Mostly Economics — Thu, 19 Mar 2009 09:43:09 +0000

[...] readers to make out, such as the asset guarantees for Citigroup and Bank of America, or the preferred-to-common conversionfor [...]

By: The Tipping Point « The Baseline Scenario

The Tipping Point « The Baseline Scenario — Wed, 18 Mar 2009 05:41:29 +0000

[...] readers to make out, such as the asset guarantees for Citigroup and Bank of America, or the preferred-to-common conversion for Citigroup. Employee bonuses, by contrast, are strikingly easy to [...]

By: jonus

jonus — Mon, 09 Mar 2009 20:25:37 +0000

suggestions please
i have around 5000 shares of common stock should i just bail on it now at a dollar a share and just chalk up the loss or anyway it can even get back to 2 dollars a share to recoup some of the loses…really just dont want to lose all of it

or once all the preferred stock is converted is it probably going to fall and stay under 1 dollar a share

By: ‘EVERYONE HAS A BANKING PLAY NOW.’ JOHN SIMON WRITING ON WWW. BASELINESCENARIO .COM. EXCELLENT REVIEW OF SEVERAL CURRENTS PROPOSALS ABOUT TOXIC ASSETS & HOW TO DEAL WITH THEM. « Want Less Blog

Mon, 09 Mar 2009 12:12:05 +0000

[...] value of the preferred you gave up. However, if you’re the government and you’re dealing with Citigroup, the common you get is worth a good deal less than the preferred you gave up. (At current prices, [...]

By: ‘EVERYONE HAS A BANKING PLAY NOW.’ JOHN SIMON WRITING ON WWW.BASELINESCENARIO.COM. EXCELLENT REVIEW OF SEVERAL CURRENTS PROPOSALS ABOUT TOXIC ASSETS & HOW TO DEAL WITH THEM. « Want Less Blog

Mon, 09 Mar 2009 12:11:01 +0000

By: Everyone Has a Banking Plan Now « The Baseline Scenario

Everyone Has a Banking Plan Now « The Baseline Scenario — Sun, 08 Mar 2009 19:12:23 +0000

[...] of the preferred you gave up. However, if you’re the government and you’re dealing with Citigroup, the common you get is worth a good deal less than the preferred you gave up. (At current prices, [...]

By: A Quick Note on Bank Liabilities « The Baseline Scenario

A Quick Note on Bank Liabilities « The Baseline Scenario — Fri, 06 Mar 2009 19:05:33 +0000

[...] theory is that the semi-forced conversion of Citigroup preferred into common shares was taken as a sign that the government may try to force creditors to exchange their bonds for [...]

By: EB

EB — Thu, 05 Mar 2009 01:43:40 +0000

Alwaleed’s alternative is to run the risk the FDIC seizes citi if things worsen, at which point as a preferred and common holder, he gets flushed. He also probably doesn’t think his pfd is worth its face amount anymore (and common worthless), so he’s already taken the loss on his investment. Anyway this way, the good prince takes a loss, but at least the govy is basically showing some mercy and keeping every other shareholder (including Alwaleed) alive. And now the government is motivated to keep Citi going, while showing reluctance to overly nationalize Citi (ie screw the remaining stockholders further), which helps motivate Alwaleed to play along. Finally, for optics, if the pfd converted at $1/common (vs $2.40) and forced the price down to $1, it would be too piggish — it would kill any desire for employees to stay and scare the heck out of customers. Hogs get slaughtered, although showing restraint ended up not helping the stock.

By: Citigroup Bailout Math | Refinancing

Citigroup Bailout Math | Refinancing — Mon, 02 Mar 2009 17:52:14 +0000

[...] James Kwak has more detailed [...]

By: News Day: It’s the economy (and the budget deficit and the CitiGroup and AIG bailouts) « Mary Turck

Mon, 02 Mar 2009 14:21:59 +0000

[...] $50 billion and Bank of America has gotten $45 billion. On Friday, a new fed deal for Citigroup, explains Baseline Scenario, means that the government will kick in money to sweeten the deal for preferred shareholders to [...]

By: Monday, March 2, 2009 « Rising in Phoenix

Monday, March 2, 2009 « Rising in Phoenix — Mon, 02 Mar 2009 12:18:14 +0000

[...] Citigroup Arithmetic Explained [...]

By: Invest Tools

Invest Tools — Sun, 01 Mar 2009 07:30:58 +0000

i am still curious where they got $3.25 from. Is it a good deal for US government? time will tell.

By: HSG at MIT

HSG at MIT — Sun, 01 Mar 2009 03:47:15 +0000

Hmmm…well this seems a better deal for the American people than the Thanksgiving deal that Citibank…that was such a crime.

By: Teri

Teri — Sat, 28 Feb 2009 22:52:01 +0000

I don’t understand why preferred shares gain so much on Friday if the preferred shares are no long receiving dividends and the gov’t are converting them to common shares.

By: Nemo

Nemo — Sat, 28 Feb 2009 22:27:39 +0000

Prof. Kwak –

I believe even if the Citi repaid the preferred stock, we would still have our warrants. The warrants are our (token) means to participate the upside.

Not that it matters, since there is unlikely to be any upside.