If this continues, S & P is on track for its worst year ever. 204 members of the S & P 500 are less than 4 billion in capitalization which is the minimum level for inclusion in the index. Tech Ticker, Yahoo! Finance
Friday, November 21, 2008
Citigroup Looks Like it is toast
Citigroup apparently is loved by a Saudi Prince and no other. The market cap of this once great institution is now below the 25 billion that it received from Hank. While I did not predict what would later happen to Lehman, Fannie, Freddie and the others at the beginning of this year, I did see enough early on to know that I did not even want to take a nibble. The price action in Citi indicates a company in dire distress. Shortly before 2 this afternoon, it had already traded over 775 million shares and is currently down over 31% to 3.23. Banking is a confidence game and the gig is up. There is no confidence left, and certainly no love for Citi. I supposed the more adventuresome individual may go into the market near the close and buy 50 shares of Citigroup, yelling at the top of your lungs I am a master of the universe and a little crazy too. It may work but I would have to say that Citigroup is giving off all the signals of a bank on the ropes with a Priest on the way to give it last rites. I would also think that if everyone just shut their eyes and kept saying over and over again there is a Santa Claus, this will all just go away. Citi may have enough capital to survive or it may not, who really knows? I certainly have no idea about how bad Citi's plight really is but I do remember Bear Stearn's saying it had a book value of $60 per share before it had next to nothing and the regulator of Fannie & Freddie saying they had enough capital shortly before they were seized by the government.