Comments on: Citigroup - As Good As it Gets? http://ContrarianEdge.com/2007/11/28/citigroup-as-good-as-it-gets/ Wed, 20 Aug 2008 18:11:43 +0000 http://wordpress.org/?v=2.0.4 by: aginensky http://ContrarianEdge.com/2007/11/28/citigroup-as-good-as-it-gets/#comment-45764 Tue, 01 Jan 2008 15:48:57 +0000 http://ContrarianEdge.com/2007/11/28/citigroup-as-good-as-it-gets/#comment-45764 Without remembering the exact details the yield is less than 11% because of the mandatory conversion at prices above the market. One needs to subtract that from the yield. To me the real value of the deal is that it guarantees the dividend for ADIA. Without remembering the exact details the yield is less than 11% because of the mandatory conversion at prices above the market. One needs to subtract that from the yield. To me the real value of the deal is that it guarantees the dividend for ADIA.

]]> by: Norman http://ContrarianEdge.com/2007/11/28/citigroup-as-good-as-it-gets/#comment-41785 Wed, 12 Dec 2007 03:20:26 +0000 http://ContrarianEdge.com/2007/11/28/citigroup-as-good-as-it-gets/#comment-41785 With the plunge in FMD, I'm sure many people are looking forward to any further comments from you. With the plunge in FMD, I’m sure many people are looking forward to any further comments from you.

]]> by: Simple Simon http://ContrarianEdge.com/2007/11/28/citigroup-as-good-as-it-gets/#comment-41755 Tue, 11 Dec 2007 23:46:40 +0000 http://ContrarianEdge.com/2007/11/28/citigroup-as-good-as-it-gets/#comment-41755 When asked about the SIZE of the coupon payment....senior managment at Citi explained it away by saying on a tax adjusted basis it is very much inline with the dividend payout. I don't know corporate accounting....and it made sense to me....what do you think? When asked about the SIZE of the coupon payment….senior managment at Citi explained it away by saying on a tax adjusted basis it is very much inline with the dividend payout. I don’t know corporate accounting….and it made sense to me….what do you think?

]]> by: Steve Austin http://ContrarianEdge.com/2007/11/28/citigroup-as-good-as-it-gets/#comment-41255 Fri, 07 Dec 2007 22:38:08 +0000 http://ContrarianEdge.com/2007/11/28/citigroup-as-good-as-it-gets/#comment-41255 "...not smart enough to do dumb things..." I love it. “…not smart enough to do dumb things…”

I love it.

]]> by: Omar http://ContrarianEdge.com/2007/11/28/citigroup-as-good-as-it-gets/#comment-39858 Thu, 29 Nov 2007 14:49:12 +0000 http://ContrarianEdge.com/2007/11/28/citigroup-as-good-as-it-gets/#comment-39858 Quick thing- Abu Dhabi is a city, not a country. Quick thing- Abu Dhabi is a city, not a country.

]]> by: Dave http://ContrarianEdge.com/2007/11/28/citigroup-as-good-as-it-gets/#comment-39791 Thu, 29 Nov 2007 04:30:47 +0000 http://ContrarianEdge.com/2007/11/28/citigroup-as-good-as-it-gets/#comment-39791 I mostly agree. It is desperation. However the question of whether to issue 11% preferred depends on whether ROE will be higher than 11% not whether their loans are greater than this. This is because this move increases equity unlike a loan. The fact that they are convertible makes this more complicated. I am sure this was probably Citi's best choice. They certainly have the sophistication to figure out the right course of raising capital. Citi will survive and prosper. I don't think they are a great buy at this price though. They will probably go even lower. There are better options around for cheap financials especially in the small cap arena. I mostly agree. It is desperation. However the question of whether to issue 11% preferred depends on whether ROE will be higher than 11% not whether their loans are greater than this. This is because this move increases equity unlike a loan.

The fact that they are convertible makes this more complicated. I am sure this was probably Citi’s best choice. They certainly have the sophistication to figure out the right course of raising capital.

Citi will survive and prosper. I don’t think they are a great buy at this price though. They will probably go even lower. There are better options around for cheap financials especially in the small cap arena.

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