Citi's fate

As I first mentioned when Citi lost out on the Wachovia acquisition and accompanying sweetheart deal from the government, Citi is TOAST!


This time last year, Citigroup (C: 3.77 -0.95 -20.13%) was valued at about $180 billion. As of market close today, its market capitalization stood at $16 billion. Its once-proud share price has shriveled to $3.77 (a 16-year low) after dropping more than 60% this week, and analysts are starting to wonder just what the future holds. There are several options facing Citigroup as it tries to stem the decline. It could sell some of its business units or even sell itself whole - both are under consideration, according to a WSJ report - or it could try to buy itself time and gain market confidence by firing Pandit. In a worst-case scenario, a government bailout along the lines of that handed to AIG could be used to rescue Citigroup. In a call with senior managers Pandit reportedly said he intends to keep the bank whole and independent, but events appear quickly to be overtaking the former Morgan Stanley executive and hedge-fund manager who took over as CEO last year. Citigroup's board was meeting to discuss its options and may decide to overrule Pandit and sanction sell-offs.