Citigroup (NYSE: C) may fire as many as 18,000 more people this year. In the second quarter, it is faced with write-offs as high as $8 billion. According to The Times, "Although Citi has raised more than $50 billion in new capital to repair its balance sheet, analysts believe it will need even more new cash to see it through the financial crisis."
Based on Citi's current market cap of $90 billion and its stock price, just above $16, raising another $10 billion could push the stock as low as $10.
One of the ironies of this is that the man who created the financial services companies through a series of mergers, Sandy Weill, still sits on the Forbes 400 list with a $1.3 billion net worth. Too bad he can't send each shareholder a small check.
Weill is an example of why some part of a CEO's pay should not be held in escrow until a decade after he retires. At least then, they might give some thought to what their actions could cause a few years down the road.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
7-06-2008 @ 6:46AM
whtm said...
AND THE SO CALLED ANALYST TALK ABOUT A BANKRUPTCY FOR ONE OF THE BIG THREE? CHRYSLER ?lol lol WELL THE IDIOT ANALYST BETTER THINK ABOUT BROKE WALLSTREET ! WE NEED A FEW BANK FAILURES ! THE FED BAILOUT OF WALLSTREET BY LOWERING RATES DID NOTHING BUT RAISE INFLATION AND DEVALUE THE U.S.DOLLAR AND MADE OIL SKY ROCKET... THANKS.THE BAILOUT DID NOT WORK BEN OLE BOY! AND TO THE ANALYST TALKING ABOUT CHRYSLER? WELL THE FIRST FOUR LETTERS IN ANALYST SAYS IT ALL BOYS!
7-06-2008 @ 11:00AM
Robert Burns said...
You have not now nor have you ever had competent management at Citigroup and to give Sandy Weill any credit for creating such a useless behemoth would destroy your creditability. Speaking about creditability, just look at their board-mostly losers;
including Robert, I wanna be around, Rubin.
7-06-2008 @ 10:43PM
alan said...
Looks like some of the commentors are getting a bit nasty. I believe there is a real chance that one of the big three US automakers can go bust. Just look at their revenue projections( too optimistic) versus their fixed costs. If there is not a dramatic turnaround by Jan. 2009 they run out of cash.
If that happens, who is going to lend these guys more money and at what rate? Look at the paper they already have out in the market now fetching 9+%, and their common shares at historic lows.
They have 4 MONTHS+ OF TRUCKS AND SUV's sitting in dealership lots. It's not a pretty picture.
As for Citi, I wonder (we will never know) how much additional junk is still on /off the books after this quarter's fiasco. Just think of it, post Q2 they will have written of close to $46 - 50 Billion !!!!!!. That's more than one years FULL EARNINGS. Who would leave ANYONE in top management or on the BOARD in place after such a horrible performance. Pandit is turning out to make Prince look good, that is quite an achievement !!!!!