Today's Outrage: Citigroup Stiffs Stockholders - If you own Citigroup Stock you're a chump.

[1776Forever]

Today's Outrage: Citigroup Stiffs Stockholders

03/19/09 - 10:11 AM EDT
Glenn Hall Blog

http://www.thestreet.com/story/10474606/1/todays-outrage-citigroup-stiffs-stockholders.html?cm_ven=GOOGLEN

If you own Citigroup (C Quote - Cramer on C - Stock Picks) shares, you're a chump. It's not your fault, mind you. You've been played by Citi. And no one is calling them on it -- the SEC and the NYSE are playing along, in fact.

You've been had.

Citigroup is playing fast and loose with its shares and stockholders get no say in the matter.

It's all spelled out in the bank's press release today stating that it plans to dilute the holdings of common stock holders by converting preferred shares into common shares, and then it will conduct a reverse stock split to reduce the total number of outstanding common shares.

Now here's the part of the press release that makes you a chump: "Shareholder approval to increase Citi`s authorized shares is not necessary."

Citi goes on to say that the NYSE granted an exception to shareholder voting requirements. The plans are on file with the SEC, and Citi's release suggests it doesn't anticipate any problems proceeding.

The plan to get the government and other owners of preferred shares to convert to common shares will first dilute the holdings of investors who currently own common shares. Don't like that? Too bad.

Then comes a reverse stock split that will convert some number of shares into a single share with the same relative value as the combined shares previously held. Of course that assumes the shares hold onto that value. Do you feel lucky?

It's not just common shareholders that are getting played here. Citi also is cleverly pushing its bailout repayment risk onto the government with these initiatives. If it all goes through, taxpayers will have to hope for a major rebound in the bank's share price in order to recoup the "investment" the U.S. Treasury made.

(snip)

Why not convert all those preferred shares into common shares and let the market decide how much taxpayers get repaid? Heck, taxpayers might stand a better chance of seeing some money return to the Treasury.

As for common shareholders, well, too bad. Citi clearly demonstrated no one cares what you think.

.........

There "they" go again!
:grr:

[NightWatcher]

1. if you own (this) stock, you are part of the problem

the little shareholders facilitate the grand theft by those who sit on boards and hold controlling interest

[1776Forever]

5. Guess what - We the people own most of Citigroup so we the people will suffer from this!

Citigroup's Clever Plan to Shaft Taxpayers Again
Posted Feb 23, 2009 11:29am by Henry Blodget in Investing, Recession, Banking

http://finance.yahoo.com/tech-ticker/article/191028/Citigroup%27s-Clever-Plan-to-Screw-Taxpayers-Again?tickers=c,xlf,^dji,^gspc

From The Business Insider, Feb. 23, 2009:

So Citigroup (C) has proposed that the US taxpayer and other preferred shareholders convert up to $75 billion of preferred stock into common stock, thus bolstering the company's tangible equity and putting it in less desperate need of a complete takeover.

And what will the US taxpayer get for this preferred stock conversion? 40% of the company for some of its $45 billion of preferred, say reports. The reports add that Citigroup's goal here is to keep the US's ownership under 50%, so this won't be a de facto nationalization.

Well, that's nice for Citigroup...and another ream-job for taxpayers.

[msongs]

2. citi stock has tripled in value recently. shoulda bought some. nt

[lldu]

4. Should sell my 100 shares

Cause when Citi is thru, I might have 1 or 10 depending on the reverse split (100-1) or (10-1)

100-1 is really doubtful, but ya never know.

These are just assumptions cause I don't have any inside information, really.

[alcibiades_mystery]

3. C stockholders are damn lucky to get a red cent on the dollar

The company should have been nationalized and the shareholders zeroed out months ago.

Whatever they need to do to get their house in order, they should do, and shareholders be damned. Seriously. Fuck 'em with a stick. They have two choices: eat whatever the loss is in the reform of the company, or lose everything in nationalization. So, the question for C shareholders is simple: would you rather have $1 per share, or $0 per share?

It's that simple. They own shares in a failed company. As it says on the prospectus, you may lose some or all of your initial investment...

[frebrd]

6. I learned long ago.......

if you own any stock, you're a chump.