Citigroup’s shares continued their breathtaking decline on Friday, Nov. 21, despite a broader market rally, indicating that time is quickly running out for Chief Executive Officer Vikram Pandit.
Pandit continues to fight mightily to restore confidence in the market. He pronounced that he has no intention to break up the global bank and that he has enough capital to withstand a tough consumer recession. But with the stock finishing down another 20%, to 3.77, from its 4.71 close on Nov. 20, speculation continued to mount that he will have little choice but to cede the bank to government control.
A dwindling market cap means Citi (C) faces extreme difficulty in either its ability to raise capital or to market itself in a sale. “When you have a decline in the share prices of this magnitude and depth, it is a signal that the company is going under,” says Martin Weiss, founder of Weiss Research. “The share price is providing the clearest canary in the coal mine.”
Weiss says it is now up to the Treasury Dept. and the Federal Reserve to figure out if they want to nationalize Citigroup, Ã la Fannie Mae and Freddie Mac. “Someone is going to have to step up and say ‘enough.'”
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