New York – Citigroup Inc shares fell to their lowest level in nearly a decade after a Goldman Sachs &Co analyst said investors should sell the largest U.S. bank’s stock short as losses mount from troubled debt.
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In morning trading, the shares were down $1.03, or 5.5 percent, at $17.82 on the New York Stock Exchange. The shares were among the biggest drags on the Dow Jones industrial average.
They also touched their lowest level since October 1998, the month that Sanford “Sandy” Weill merged his Travelers Group with Citicorp to create Citigroup.
William Tanona, the Goldman analyst, added Citigroup to Goldman’s “Americas conviction sell” list and cut his price target on the stock to $16 from $20.
He recommended a “paired” trade in which investors sell Citigroup shares short, betting on a decline, and buy Morgan Stanley shares.
The analyst said Citigroup might take $8.9 billion of write-downs for the April-to-June period, leading to its third straight quarterly loss. He also said the bank might need to cut its quarterly dividend for a second time this year, after lowering it 41 percent to 32 cents per share in January.
Tanona’s forecast suggests deeper problems for Citigroup Chief Executive Vikram Pandit, who is trying to turn the bank around after nearly $15 billion of losses in the last two quarters, and more than $46 billion of credit losses and write-downs since the middle of 2007.
“We see multiple headwinds for Citigroup including additional write-downs, higher consumer provisions as a result of rapidly deteriorating consumer credit trends, and the potential for additional capital raises, dividend cuts, or asset sales,” the analyst wrote.
Pandit became chief executive in December, replacing Charles Prince, who resigned under pressure the previous month. Weill had hand-picked Prince as his replacement when he gave up the top job in 2003.
Last week, Chief Financial Officer Gary Crittenden said on a Deutsche Bank conference call that Citigroup could take substantial write-downs this quarter.
I thought I got a deal when I purchased shares at 32.00
we are in big trouble and if Obama get his hand on this Country we are truly finished
i thought i got a good deal when i went 50k on Goldman at $54 when they first went public.
well maybe let them move all their branches to 13th ave and Ave J it will surely pick up lol!!!
BTW is there room for even one more bank lol
Raboisai Nemts arois thoos gelt fin citi bank . Citi geit krachen. halts dos gelt unter the dochena and unter the mattress
I took my money out from citi already last week..i am thinking now if i should also take out from other banks…Es iz zurous
how can i take out someone elses money from citybank
Sorry guys, unfortunately I have no money to take out from there at all…
gevaaaaald
defineatly zei gyen krachen, they didn’t honor a 20.00 check of mine. imagine- they didn’t have 20.00 to pay my check. I’d take out all my money from there… but eech hob nist