Citigroup shares dip below $1 - Democratic Underground

W_HAMILTON

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Thu Mar-05-09 01:24 PM
Original message

Citigroup shares dip below $1

That's the big headline on CNN.com right now.

I have a question.

Let's say you buy a lot of stock, assuming that at some point, Citigroup's value HAS to go up.

But then the government nationalizes Citigroup for a period of time.

What happens to your stock investments in the company? Do you get to keep them when they are de-nationalized? Are they completely wiped out?

Does anyone know how that works? I can't imagine Citigroup going under, or the government allowing them to go under. So, assuming you get to keep your stocks through a possible nationalization, it seems like a good long-term buy.

Anyone have any advice?

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truebrit71

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Thu Mar-05-09 01:25 PM
Response to Original message

1. If the government 'nationalizes' Citi the shareholders are wiped out..

...stay away from Shittybank...

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MercutioATC

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Thu Mar-05-09 01:27 PM
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2. If it's nationalized, Citi's common shareholders are out 100%

If it goes bankrupt, the same.

Less than a buck is a great deal...but only if it survives.

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W_HAMILTON

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Thu Mar-05-09 01:30 PM
Response to Reply #2

3. Ahh, ok, thanks for the advice.

Well, that makes sense why it's tanking so much right now.

I assumed that in our market-loving country, that even if they nationalized Citigroup, that the stockholders would still retain their investment in the company; just that it would be run by the government for awhile.

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A HERETIC I AM

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Thu Mar-05-09 01:32 PM
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4. Likely the same thing that happened to Fannie and Freddie common stock.....

Edited on Thu Mar-05-09 01:43 PM by A HERETIC I AM

from share prices in the high $60's to less than fifty cents.

The play is not with their common equity but their senior debt. Their bonds with short term (less than 3 year) maturities are yielding well into double digits.

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The Unknown Derelict

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Thu Mar-05-09 01:36 PM
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5. Limbo! Old fads are new again!

Edited on Thu Mar-05-09 01:39 PM by The Unknown Derelict

How low, can they go?

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billyoc

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Thu Mar-05-09 01:40 PM
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6. I see their ATM fees are still $3.

:rofl:

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GoesTo11

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Thu Mar-05-09 04:07 PM
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7. Why is no one in jail?

Two years ago, it was steadily at 50+. Now it's 1. Investors look at companies' financial statements etc. to figure out what is likely to happen to the company in the future and to figure out what the stock should be worth, it's not just emotion and hunches. So how could the same stock that analysts thought was fair at 50 is now worth 1?

That's not just bad luck. There must have been fraud. Here and many other places. How come there has been no criminal investigation whatsoever?

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