Yes, without doubt that is why we're barely breaking $3 while BAC, which is smaller in terms of revenues and scope (Citigroup has been touted as the only truly international bank), is over $14.50 right now.
On the good side, we know what will become of the government's stake of 34%. That IS good news...the market doesn't like uncertainty and this puts the issue to rest. The BAD news is the obvious dilution, but one could argue that at these prices Citigroup is still a buy. For me, I'm looking at the most stable and reliable bank I can find that still has lots of room for pps growth. BAC is the safer bet, but at $14+ I have to wonder how much higher it will go. Citigroup is around three bucks, and even if dilution pushed it down to a dollar, its bedrock position as a world banking institution that WILL survive and is becoming very profitable should outweigh the short-term dilution over time. THat's just it. As long as we know Citigroup will not be nationalized (which it won't that is for certain now), and it IS profitable (has more earnings than even BAC, looking at the Reuters report), it may very well be worth speculating on. Surely they won't convert all those shares all at once; that would be a disaster and everyone knows it. Also, for the taxpayer to get maximum return on their "investment" (investment at the end of a loaded gun, IMHO), they will do well to convert shares as times get better and we return to at least double digit stock prices.
So, there it is. The fear of a R/S and serious dilution are keeping our price down. This could be the time to buy...I missed BAC at $2.53 and instead bought in at $10, but Citi still has the potential to deliver 3-5X investment within the next next...dare I say by the end of this year depending on the economy and their dilution; Citigroup COULD be $9 or thereabouts. If one of the wealthiest men in the world bought 26 million shares, he must not be too worried, even with the R/S and dilution that is certainly coming. I think I'm in after I complete another trade next week...we'll see. Hopefully the fear will keep pps down this week because I want to get in...I'll throw a couple grand at it, anyway.
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