Why doesn't Citi buyback its stock in the open market?

Discussion in 'Stocks' started by rida07, Nov 22, 2008.

  1. Have citi quietly buy back 100% of the stock..then if there is even 1 short seller still there in the market, citi places a sell order at 5 billion dollars per share and 5 minutes later call the broker and say "I refuse you let you have anyone borrow our shares to short. Then there is a forced liquidation and the new 5 billion dollars per share price is what they have to buy it back at!
     
    #11     Nov 22, 2008
  2. C is the test on how dumb (corrupt?) the government is. they have bailout funds, they are allowed to buy shares of financial companies so that the government becomes a shareholder (swedish model). they should start accumulating these cheap shares by spending ~$1-5B. on top of that they could also infuse more money into C to guarantee their investment. this is actually a very safe money-making scheme for the goverment. as opposed to the money-wasting scheme (GM).

    sh*t, just the announcement that the goverment is ready to buy C at the open market will make it trade $10.

    i repeat, the government can't lose here and will actually make $$ in 1-2 years.

    the only way they lose if C fails anyways. but if C fails, >50% of other banks must fail = total kaput (global depression coupled with nuclear winter and ass farking without vaseline).
     
    #12     Nov 22, 2008
  3. No. I can easily see it being chopped up into pieces and disappearing as a distinct corporate entity while the viable parts live on as parts of other companies.
     
    #13     Nov 22, 2008
  4. Having the gov't buy C stock on the open market does not get any fresh capital onto the books. Doing a preferred or convertible would, of course, but in circumstances like these those generally involve wiping out the current common.
     
    #14     Nov 22, 2008
  5. because it takes money that they obviously dont have much of.
     
    #15     Nov 22, 2008
  6. rida07

    rida07

    As of Wednesday/Thursday they had plenty of capital. Not sure if Friday price action started a run (we will find out more about that within the next 24-36 hours about that).

    And to be clear - what I am suggesting is taking funds that were earmarked for year end bonuses (not working capital).
     
    #16     Nov 22, 2008
  7. rida07

    rida07

    I just checked the terms of the $25 billion given to Citi under the EESA - it says they cannot initiate buybacks (or increase dividends) without the consent of Treasury.

    So something like this would have to get Paulson's approval.
     
    #17     Nov 22, 2008