Donate today to get yours!
Citi looks to loosen gov’t bailout grip
Share Now on:
TEXT OF STORY
Bill Radke: In his speech yesterday on Wall Street, President Obama said taxpayers have made a 17 percent profit so far as banks have paid back their bailout money. Well we could soon see a little more profit. News reports say Citigroup is exploring ways to pare down the government’s 34 percent stake in that bank. Marketplace’s Amy Scott reports.
Amy Scott: The U.S. Treasury owns more than seven billion common shares of Citigroup stock. Citing unnamed sources, Bloomberg News reports the Treasury may begin selling those shares as early as next month.
Linus Wilson teaches finance at the University of Louisiana at Lafayette. He says that’s a lot of stock to be trying to unload.
Linus Wilson: It would be very hard to sell the common stock stake to investors without negatively affecting the share price.
Bloomberg says the government may try to sell its shares gradually over six to eight months. With the recent rise in Citigroup’s stock, the taxpayer could make a profit. Citi got $45 billion in bailout money.
Even if the government sells its common shares, taxpayers are still out billions of dollars. The Wall Street Journal reports the bank plans to raise capital from investors to pay the rest back.
Citigroup told Marketplace this morning it’s not commenting on the reports. The Treasury Department also declined to talk about any plans.
In New York, I’m Amy Scott for Marketplace.