U.S. Treasury department ditching $hitibank?

[marmar]

:think:

from 24/7WallStreet:



The US Treasury Department may have lost faith in Citigroup (NYSE: C), perhaps due to the way that the new financial reform laws will undermine its earnings. What one hand givith, the other taketh away.

The Treasury means to get out of Citi shares before a likely string of bad earnings.

The U.S. Department of the Treasury today announced its continued sale of its holdings of Citigroup common stock, the government said. Treasury has entered into a third pre-arranged written trading plan under which Morgan Stanley, as Treasury’s sales agent, will have discretionary authority to sell 1.5 billion shares of Citigroup common stock under certain parameters. And, Treasury currently owns approximately 5.1 billion shares of Citigroup common stock and expects to continue selling its shares in the market in an orderly fashion.

-- Douglas A. McIntyre


http://247wallst.com/2010/07/23/us-treasury-to-dump-more-citigroup-shares-perhaps-fearing-the-impact-of-financial-reform/

[JPZenger]

1. Long planned sale of stock

The Federal Government always planned to sell Citicorp stock. They just need to do it in phases so that taxpayers can make a profit. So far, the US treasury has made $1 billion of profit from its bailout of Citicorp. This sale represents a long-planned process of periodic sales. If they dump all of their stock on the market at one moment, it will depress the price and cause a loss to taxpayers.

[Statistical]

2. What a bunch of bunk.

"Treasury has entered into a third pre-arranged written trading plan"

So they are executing a pre-arranged plan to slowly unwind the govt position as quickly as possible without flooding the market.

Some how that is spun to mean "The Treasury means to get out of Citi shares before a likely string of bad earnings."