Eddie Lampert builds stake in Citigroup

Posted May 16th 2007 9:43AM by Eric Buscemi
Filed under: Citigroup Inc. (C), Sears Holdings (SHLD)

Citigroup Inc (NYSE: C) has attracted the attention of Eddie Lampert, hedge-fund manager extraordinaire. Why? Two reasons.

First, Citi is a good way to play a steepening yield curve. With the economy, for the most part, showing signs of slowing down, Fed interest rate drops should lead to high profits for the financial services giant.

Second, displeasure with Citi's CEO, Chuck Prince, could lead to management changes or a break-up of the company. Tom Brown of Second Curve Capital and Bankstocks.com has been suggesting the break up of Citi for some time.

Sometimes in the investment business it is best not to think but to follow. Lambert has been on a great roll so why not go along for the ride. Citi generates a good dividend, prints money and portfolio managers will have to shift more of their assets into financial service stocks as the fed drops rates and the yield curve steepens.

Tags: c, chuck prince, ChuckPrince, citigroup, eddie lampert, EddieLampert, sears, shld

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Reader Comments (Page 1 of 1)

5-28-2007 @ 11:56AM

Jim said...

I'm not clear on this. Is this merely an investment by Lampert, or is he, as some say, looking for control? Wouldn't Citi's large market cap ($273B per Yahoo)preclude the latter? Lampert has access to a lot of money, but is there enough to make a difference?