C will fail stress test, shares headed to $1

Discussion in 'Stocks' started by Daal, Apr 20, 2009.

  1. Daal


    This bank is quite likely to fail the stress test, it wont fail in the eyes of the administration but it will fail in the eyes of the market. When Geithner said 'some banks will need large amounts of capital' in all likelyhood he was talking about Citi, I cant prove it but it seems very likely.
    They have $2T in assets but its $3T when added the off-balance sheet items, after the preferred exchange they will have $80b in TCE, which is not enough
    Shares are headed to $1 or lower
  2. m22au


    While I agree that C has a dodgy balance sheet, it's possible that the govt exchanges preferred for common at a "high" price.

    For example C was at 2.50ish when they announced a conversion at 3.25

  3. Daal


    The gov has 'changed the rules' when there was political pressure involved, I see little reason they would change the conversion price and give the markets yet more evidence the rules will keep changing, at this point they are trying to assure investors the rules are firm, the management has said they see no reason to change as well
  4. eagle


    The $1 estimation is it for the reason for the second time that the Low will be reached?

    How about the similarity with ABK? $1.00 and then bounce back to about $1.40 and back again to $0.40 and back to $1 again.

  5. Daal


    The 'nationalized club' FNM FRE AIG seems to have stabilized around $1, for some reason this seems to be the number where the gamblers are drawn and where they support the stock hoping a miracle happens, abk too, and mbi soon
  6. The sooner this heap is gone the better off all of us will be.
  7. yonisin


    What ever happened to the public/private partnership to rid the banks of toxic assets. C has already effectively been nationlized. Obamanation now feels not much resistance to bring the others into the fold.
  8. TGregg


    Do not forget the power of lobbyists, campaign contributions and all the rest. C is top dog in political pull, right with BAC. In some ways it might even be reversed. But you can bet your bottom dollar that C is far more integrated into the political machine than even GM. GM will cost us a hundred billion or so before they fail. C will cost us several before they finally go under.
  9. Daal


    These rumors Pandit will be asked to step down seems like a huge tell, looks like C failed big, they are now preparing the political world for the additional capital injections, they know it would be an outrage to dump more tens of billions there without changing management
  10. Daal


    Fed total estimated losses for C, $104b
    Capital need $92b
    Their conversion actions, pre-provision earnings and reserves lowered that to $5b
    They failed but it looks like I was wrong on the share price, this market is too wild to go down
    #10     May 7, 2009