Citi

Possible conversion prices for preferred to common stock:

http://globaleconomicanalysis.blogspot.com/2009/02/bernankes-boiled-frog-plan-to.html

"Conversion price is 90% of the average closing price for the common stock for the 20 trading day period ending February 9, 2009."

Citigroup 20-days ending 9 February:
average price = $3.85

BAC 20-days ending 9 Feb:
$6.93

 

So, now C is the only tripple A bank in the world?

How fast the tables turn.

Everyone run to C and put your money there it's safe.

 

Until gov suspends withdrawl

 

ouch!

 

Think of all the investors that thought they were safe with preferred, totally screwed them.

 

David Faber on CNBC said that some of the C preferred were trading at 15 cents on the dollar.

So if we assume a share price of $1.50, then 1.50 / 3.25 = 46 cents in the dollar.

So using this line of thinking, 46 cents in the dollar is better than 15 cents in the dollar.

 

These C preferreds are gapping UP

C-I CITIGROUP INC PFD 10.54 NYSE
C-M CITIGROUP PFD F 6.09 NYSE
C-ML Citigroup 5.864 Cum 50.32 NA
C-N CITIGROUP IV 6.85 NA NA
C-P CITIGROUP PFD SER AA 5.48 NYSE
C-QL Citigroup Adj Rt Dep Pfd 24.98 NA
C-R CITIGROUP CAP X 7.74 NYSE
C-S CITIGROUP CAP IX 6.0 7.32 NYSE
C-U CITIGROUP CAPITAL XV 7.31 NYSE
C-V CITIGROUP CAP VII 7.99 NYSE
C-W CITIGROUP INC. 6.45% 7.15 NYSE

 

Perhaps these C pref trusts are pricing in more solvency and ability to pay as the big pref holders convert?

 

Yes, although the calculation may be simplistic, you could value preferred stock at

(common stock price / 3.25) * par value of preferred stock

 

there are 5.4 billion shars outstanding. if we dvide 26 billion by 3.5 we get about 7.5bshares adilution of
does this mean a dilution of 55% ?
calculations correct?