Shares of the embattled financial firm dip below $1 a share, as investors continue to have a dire outlook for the bank.NEW YORK (CNNMoney.com) -- Citigroup logged another dismal milestone Thursday, as shares of the beleaguered bank slipped below $1 a share.
The move, which may have seemed unthinkable just months ago, came as the broader market fell once again toward new 12-year lows due to worries about the health of the banking sector and the broader economy.
Citigroup (C, Fortune 500) shares were hovering at about 99 cents in midday trading on the New York Stock Exchange, 12% lower than where they closed on Wednesday. It is the lowest level for the bank's stock since Citicorp and Travelers Group merged in 1998 to create Citigroup.
At its height, Citigroup stock traded around $57 a share. That was in December of 2006, just months before subprime mortgages began to become problems and the credit market unraveled.
But fears about Citigroup's exposure to soured mortgages and other consumer loans have sent shares plummeting this year, wiping out billions of dollars in shareholder value as a result.
The bank reported losses of nearly $28 billion last year and investors remain worried that the bank will continue to lose money as the economy weakens.
The stock lost more than half its value last month alone as speculation grew that the government would have to step in and effectively nationalize the company.
Last Friday, the government unveiled plans to convert a portion of its $45 billion stake in Citigroup into common shares, a move that could give taxpayers as much as a 36% stake in the bank.
Those efforts represented the latest government-led efforts aimed at propping up the ailing financial institution.
In October, the Treasury Department injected $25 billion into the company. Less than two months later, regulators intervened again with an additional $20 billion investment and an agreement to backstop some losses against more than $300 billion in Citigroup's troubled assets.
Since then, Citigroup has outlined plans to split the company into two businesses, effectively bringing an end to the company's "financial supermarket" model. Under the new arrangement, Citigroup would split itself into two units: Citicorp and Citi Holdings.
http://money.cnn.com/2009/03/05/news/companies/citigroup/index.htm?postversion=2009030511
Topic: Citigroup breaks the buck (Read 653 times)