The Treasury announced plans to sell 7.7 billion in Citigroup Inc (C.N) shares this year, a move to further diminish government authority over the institution.
The Treasury stands to earn roughly $7 billion in profit from the sale of the shares they acquired during the financial crisis. They have pledged to sell the common shares in “an orderly and measured fashion.” Morgan Stanely will advise them on the deal that they say will be performed in an agreed upon structure.
The announcement was a relief to investors worried the government would sell their entire 27 percent stake in the company in one fell swoop. A lump-sum stock sale would weigh downs hare prices for investors beyond the 2.6 percent loss endured since this morning’s announcement. Shares of Citibank are currently trading at $4.19.
The Treasury reportedly has plans to discharge its contract with Morgan Stanley over the next two hours says a spokesperson.
When the sale is complete the Federal government will still have a $5.3 billion stake in Citigroup trust preferred securities. Citigroup has gathered approximately $20 billion of capital to purchase the government held trust preferred securities.
About EQUITIES:
Since 1951, EQUITIES Magazine has been a leading media company providing business editorial content designed to serve the needs of business leaders, professionals, institutional investors and retail investors. We are focused on business and the business of making money, not on lifestyle subjects. We publish original reporting in print and on our website, as well as select content at www.nasdaq.com. For 28 years we have hosted our own branded investor conferences that connect public company CEO’s with our loyal readers in the investment community.
Sign up for a free one-year subscription
