With rumors swirling that Citigroup (NYSE:C)'s CEO Chuck Prince is about to get the axe, this may be the time to start building a position in the financial company. It's no secret that investors have been pleading to get rid of Prince, and with all the recent turmoil, I think investors will get their wish.
With Citi stock badly under-performing its competition since the departure of Sandy Weill, the only thing investors have received are tax-losses. I realize that it's never smart to get in front of a moving train, and right now Citi stock is like a locomotive heading straight downhill, but if Prince gets sent packing, and an outside person is brought in to be CEO, watch for Citi stock to change direction and start moving up.
There is plenty of value in Citi. The clear way to unlock that value would be to start spinning off divisions and let its true value be recognized.
It's gonna be a fun weekend for investors and a nervous one for Prince. Let's see if the old adage that it's better to be a king than a prince holds true.
Disclosure: Writer holds no position in any stock mentioned as of 11/2/07.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com.
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Reader Comments (Page 1 of 1)
11-02-2007 @ 4:07PM
Chuck said...
Let's just watch as Prince walks away with a bundle of our money. A Sandy Weill he is not.
11-02-2007 @ 6:33PM
parker55 said...
HAVE JOHN REED COME BACK AS INTERIM CHAIRMAN UNTIL THE NEXT CEO IS FOUND. MR. REED KNOWS THE COMPANY STRUCTURE AND CAN BE AN INFLUENTIAL FORCE IN SELECTING THE PROPER NEXT CEO CANDIDATE. THIS WOULD RESOLVE ANY TURBULENCE DURING THE TRANSITION PERIOD.
11-02-2007 @ 8:06PM
Your Kidding Me, Chuck said...
A Sandy Weill he is not for sure, and that's a good thing. Most if not all of Citi's problems can be traced back the Sandy's disasterous leadership. The only think Sandy could ever do is buy and then cut. He never did make anything actually work. Sandy looted Citi's treasury for over $1Billion. Chuch may not be a great leader, but at least he's not evil.
11-03-2007 @ 4:13PM
gerry cull said...
Men, keep your powder dry; it's going to be a "dead cat bounce" at Citi. Citigroup may be divided in three separate divisions with one Board.
The wiliful Weill will turn the ship, but it won't be next week.
Geraldo Cullen