This morning's news.
As part of the TARP plan, and also in a supplemental purchase, you the taxpayer have purchased about $45 billion worth of convertible preferred stock in Citigroup.
Today, the government has made a deal with Citi to swap about $27 bn of that preferred for common.
Since the entire market value of Citigroup’s common stock was slightly below $27 bn as of yesterday’s close, the deal amounts to creating about as much new stock as existed beforehand. So each existing share is now worth about half as much.
And in pre-market trading, they’re down just about… half.
I'm waiting for my dividend check.
Ritholtz has an opinion on this move: Losers double down
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