Oppenheimer & Co. managing director Meredith Whitney rose to fame with her presciently bearish analysis of Citigroup (NYSE: C) in October of 2007. Given that she's one of the few people who essentially predicted this entire debacle, she's probably worth listening to. Here's what she said in a note to investors on Citi's fourth quarter 2008 earnings. Pay close attention because it's a highly complex and nuanced argument:C's core problem is that it simply doesn't make money in any of its businesses except Smith Barney, which it is in the process of selling.
You hear that federal government? Now stop plowing money into this train wreck!
If Meredith Whitney is right, Citigroup's stock is still overvalued: A company facing huge losses and no way of making money can't really justify a $15 billion market cap, can it?
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Reader Comments (Page 1 of 1)
1-21-2009 @ 2:14PM
Leo said...
She's dead wrong-They make money... What about the Transaction service?
1-21-2009 @ 3:24PM
Nick said...
What Meredith really means is that Citi doesn't make any money in relation to its size and required capital. I believe she is right on in that regard.