Okay; I can honestly say that I didn’t see this happening. I figured that Citigroup, like Bank of America and JP Morgan Chase, would both be strong enough to weather almost anything the economy could throw at them, but their recent stock movements are highly precipitous.
Executives at Citigroup Inc., faced with a plunging stock price, began weighing the possibility of auctioning off pieces of the financial giant or even selling the company outright, according to people familiar with the matter.
The internal discussions are at a preliminary stage and don’t signal that Citigroup’s board and management are backing down from their insistence that the New York company has ample capital, funding and strategic direction, these people said. But with the stock down another 26% Thursday, its worst one-day percentage decline ever, Citigroup officials have decided they need to reckon with a range of scenarios that were unthinkable only weeks ago.
Citigroup’s board of directors is scheduled to have a formal meeting Friday to discuss the options, according to a people familiar with the situation. Meantime, directors have been talking by phone about what could be done to reverse the stock’s slide.
Top executives were locked in meetings Thursday to hash out a stabilization strategy. A Citigroup spokeswoman said in a statement Wednesday evening: “Citi has a very strong capital and liquidity position” and is “focused on executing our strategy,” which includes cutting expenses and selling assets. “We believe the benefits will be seen over time.”
With roots stretching back to 1812 and more than 200 million customer accounts in 106 countries, Citigroup is an icon of global capitalism. It is getting battered by the same financial storm that has already remade the face of Wall Street, forcing the sale of Bear Stearns Cos. and Merrill Lynch & Co. earlier this year, and triggering the bankruptcy filing of Lehman Brothers Holdings Inc.
Chief Executive Vikram Pandit and other Citigroup executives have told colleagues they are frustrated and befuddled by this week’s 50% stock decline. Investors have dumped bank stocks en masse on fears that economic woes will batter financial companies worse than previously expected.
It’s going to be interesting to see how this plays out. Wonder if the A-Train has been shorting “C”?