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Why doesn't Citi buyback its stock in the open market?
- Thread starter rida07
- Start date
Why make shareholders happy when it's the bondholders/lenders that need to be pacified?
Quote from Random.Capital:
Why make shareholders happy when it's the bondholders/lenders that need to be pacified?
because a low share price is shaking the confidence of depositors (both corporates and individuals). so stabilizing the stock price is in the best interest of bond holders as well.
this is also reflected in the rating agencies move to include share price as a metric in ratings. and also a lot cheaper than government intervention.
Not making myself clear here - their (potential) lenders are scared shitless - if Citi started wasting money on "investors" who are back of the bus in terms of priority they'd be shut down in a NY minute by their lenders.
Citi in some form will likely survive - but I am doubtful the common will have any value.
But hey, stranger things have happened....
Citi in some form will likely survive - but I am doubtful the common will have any value.
But hey, stranger things have happened....
Quote from rida07:
It can use funds it earmarked for bonuses and use those shares to give for employee compensation.
This will serve to stabilize its stock price, put pressure on the short sellers, and prevent dilution from issuing new stock for compensation.
Thoughts?
This may happen, as soon as Monday. Hundreds of billions available from the Treasury... and the profits will be huge for the Treasury and Citi. Stock could double or triple (not a big deal for a $3 stock) with a short squeeze engineered with Treasury funds.
Quote from Random.Capital:
Not making myself clear here - their (potential) lenders are scared shitless - if Citi started wasting money on "investors" who are back of the bus in terms of priority they'd be shut down in a NY minute by their lenders.
Citi in some form will likely survive - but I am doubtful the common will have any value.
But hey, stranger things have happened....
I see your point - but they are buying it with the funds that were earmarked to be paid for year-end compensation.. so really it's the employees that are funding by agreeing to receive Citi stock (From the open market) instead of cash... kind of like a mini privatization..
Citi market cap stood at around 21 bln.. Citi has probably set aside 8-10 billion in funds for year-end comp. Using those funds to buy stock would be a win for all..