Friday, February 27, 2009

Congrats! Now You Own 40% of Citigroup!

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

HT: RedState

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