Citi plunges 26% - lowest in 15 years

Prince Alwaleed Bin Talal, the embattled bank's largest individual shareholder, is raising his stake back to 5%. But stock continues to plunge.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By David Ellis, CNNMoney.com staff writer

citi.imkw.gif

NEW YORK (CNNMoney.com) -- Citigroup Inc. suffered another brutal day on Thursday as shares tumbled to their lowest level in more than 15 years.

News that the giant bank's largest individual shareholder, Saudi Prince Alwaleed Bin Talal, planned to increase his stake to 5% did little to resolve questions enveloping Citi in recent days.

"Unfortunately it seems like they [sellers] are sitting on Citi here," said Todd Leaon, head trader at Cowen & Co. "It's sell first and ask questions later."

Shares of Citigroup (C, Fortune 500) cratered 26%, extending the brutal losses from Wednesday, when the stock lost nearly a quarter of its value.

So far this year, Citigroup stock is down 83%.

The Wall Street Journal, citing sources familiar with the situation, reported Thursday night that Citi executives were set to meet Friday to discuss their options, including selling off pieces of the company to raise capital.

The move by Alwaleed, a long-time investor in the New York-based bank, follows the U.S. government's decision to inject some $25 billion. That left Alwaleed with about a 4% stake in Citigroup.

Alwaleed, in a press release from his holding company, expressed his faith in Citigroup management, including CEO Vikram Pandit. He added that he believed the company was doing what is necessary to weather the current economic crisis.

Alwaleed's firm did not provide terms of the purchase including how many shares he would purchase or at what price.

Based on the most recent securities filings, Alwaleed and his holding company owned more than 250 million shares of Citigroup.

Alwaleed is one of the world's richest people and worth about $21 billion, according to Forbes. The Saudi prince first acquired a stake in Citicorp, which later became Citigroup, in 1991. According to filings, Alwaleed also is a big investor in media company News Corp and online travel site Priceline.com.

Earlier this year, he was among a group of investors who invested $12.5 billion in Citigroup, as part of an effort by the bank to raise capital.

Citigroup, one of the hardest hit financial firms during the credit crisis, has faced plenty of scrutiny in recent weeks.

Earlier this week, the New York City-based bank unveiled plans to cut its staff levels by more than 50,000 in an attempt to reduce expenses as it braces for what many are anticipating will be a difficult economic climate in 2009.

There has even been talk that changes could come at the top of the organization although the company has strenuously denied such speculation.

At the same time, analysts have warned that the company still faces a large exposure to problem assets, such as mortgages, credit cards and commercial real estate.

Fox-Pitt Kelton Cochran Caronia Waller analyst David Trone noted in a report earlier this week that the bank would likely be forced to take additional writedowns and report another loss in the fourth-quarter.

The bank has lost more than $20 billion in the past four quarters.

Citigroup is also bracing for a tough economic climate in 2009, which could translate to rising losses tied to consumer and business loans. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
Want to buy -- and live in -- a piece of history? It's not that far out of reach. These historic homes are not only for sale, they are incredible bargains. More
5 ways retailers are tracking you If you think pesky salespeople are invading your personal space, check out these 5 technologies that are tracking your movements throughout a store. More
Moto X vs. Droid Turbo: Which Droid should you buy? Motorola has made the two best Android smartphones this year. Here's how they stack up. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.