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  • Is there a case for buying Citigroup?

    Posted May 12 2008, 10:09 PM by Matt Koppenheffer
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    If Citigroup were a Hollywood actor, right now we'd be seeing pictures of a rumpled star donning sunglasses to cover up bloodshot eyes, and assuring the press that he made some mistakes, but that his troubles are behind him. Some press would decry a waste of talent and a bad example for the kids, while others would say that they feel sorry for him and hope he gets the help he needs.

    Citigroup the bank isn't far from that. It had the global reach, the brand, and supposedly the talent. Now its new CEO is trying to pick up the pieces and the company is finding itself the butt of jokes. Oppenheimer analyst Meredith Whitney thinks there's little hope for a turnaround and quipped that "even Stephen Hawking could not pull this off" (kudos to Meredith for the very quotable moment). Douglas McIntyre at 24/7 Wall St. thinks that a pessimist case puts the stock at $10 by year end.   Read More...

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  • The financial industry: Yeah, it's that bad

    Posted Jan 18 2008, 04:12 PM by Matt Koppenheffer
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    Earnings have been pouring out of the financial sector all week and the picture hasn't been pretty. "Write-down" has commanded a starring role in this quarter's earnings reports dashing ahead of "earnings per share" as what investors seem to care about the most.

    Citigroup, whose stock just can't seem to find a bottom, seems to have been the worst of the bunch. In an interesting twist, much of the pessimism over the company's quarter came because Citigroup only wrote down some $18 billion and didn't propose as many job cuts as the market was hoping.

    CAPS still rates Citigroup just two stars out of five, but there has been some bullish sentiment after the company's earnings release. Michaelkoh1 rated Citi's stock an outperformer and noted that "2007 will be tough, and there will likely be more pain for equity investors as the financials muddle through this year, but this is a strong diversified franchise and will outperform the market over the next 2 to 4 years."   Read More...

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  • Citigroup and Merrill: perform or die?

    Posted Nov 05 2007, 10:33 AM by Matt Koppenheffer
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    There's a sidebar on the Wall Street Journal website right now with the title "perform or die" and pictures of Chuck Prince and Stan O'Neal -- now, respectively, the former CEOs of Citigroup and Merrill Lynch. By "die," of course, the WSJ means to be fired, as both have very recently found themselves jobless, but still very much alive. While the headline is certainly an eye catcher, is it true?

    One might argue that no matter where you're the head honcho, if you don't perform you may quickly find yourself back on HotJobs. The case is a bit different for Prince and O'Neal though. The banks of both CEOs racked up massive losses and write-downs from the mortgage and credit markets under their watch.

    In the case of O'Neal, it was $8.4 billion in write-downs in the third quarter capped off by furtive talks with Wachovia about a merger that cost him his job. More recently for Prince, it was Citigroup's underperformance versus its competitors over the preceding years, combined $6.5 billion of write-downs in the third quarter and an expected $8 billion to $11 billion of further write-downs in the fourth quarter that spelled the end.   Read More...
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