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cwsiggy
Carpal \'Tunnel

Reged: 10/18/04
Posts: 3883
Loc: Philadelphia

who's buying Citigroup
#13141824 - 11/27/07 04:54 PM

Ok - so I'm a bit removed from the markets (used to work on the Street at a nasdaq market maker - but.......

Who's buying Citigroup? Is there a trade here with leaps?
Seems too good to be true at this price or am I a simpleton.
Remember Altria at 19???

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mmctrab
addict

Reged: 09/12/06
Posts: 478
Loc: Steeler country

Re: who's buying Citigroup [Re: cwsiggy]
#13142876 - 11/27/07 06:08 PM

I bought some Bank America today and I'm very close to buying some Citibank shares as well. You could buy LEAP calls and tie up less capital, but I'd be afraid it might take a couple of years for the stock to recover so I'd lean towards buying the common and collecting the 6% dividend while I'm waiting.

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cwsiggy
Carpal \'Tunnel

Reged: 10/18/04
Posts: 3883
Loc: Philadelphia

Re: who's buying Citigroup [Re: mmctrab]
#13145251 - 11/27/07 08:39 PM

Quote:

I bought some Bank America today and I'm very close to buying some Citibank shares as well. You could buy LEAP calls and tie up less capital, but I'd be afraid it might take a couple of years for the stock to recover so I'd lean towards buying the common and collecting the 6% dividend while I'm waiting.

I was thinking leaps. I can't imagine that dividend sticks..(Freddie just cut theirs in half today - different sitchy sorta I know but....)

Edited by cwsiggy (11/27/07 08:45 PM)

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mmctrab
addict

Reged: 09/12/06
Posts: 478
Loc: Steeler country

Re: who's buying Citigroup [Re: cwsiggy]
#13145926 - 11/27/07 09:25 PM

I dunno. Their management says they're not going to cut the dividend, but who can tell for you.

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pig4bill
Carpal \'Tunnel

Reged: 12/10/05
Posts: 2658

Re: who's buying Citigroup [Re: mmctrab]
#13150867 - 11/28/07 03:59 AM

Too good to be true? The company takes out what amounts to a subprime mortgage, and pays 11% interest. That sure sounds like desparation. Too good to be true, lol.

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cwsiggy
Carpal \'Tunnel

Reged: 10/18/04
Posts: 3883
Loc: Philadelphia

Re: who's buying Citigroup [Re: pig4bill]
#13154401 - 11/28/07 12:43 PM

Up $2 - someones' buying. lol see how easy that trade was.

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Jimbo
Carpal \'Tunnel

Reged: 09/02/02
Posts: 4376
Loc: Planet Earth but relocating

Re: who's buying Citigroup [Re: pig4bill]
#13156605 - 11/28/07 03:14 PM

Quote:

Too good to be true? The company takes out what amounts to a subprime mortgage, and pays 11% interest. That sure sounds like desparation. Too good to be true, lol.

You are trying to make a complex transaction seem too simplistic.

Jimbo

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Phone Booth
enthusiast

Reged: 08/08/06
Posts: 241

Re: who's buying Citigroup [Re: pig4bill]
#13156719 - 11/28/07 03:21 PM

Quote:

Too good to be true? The company takes out what amounts to a subprime mortgage, and pays 11% interest. That sure sounds like desparation. Too good to be true, lol.

It's actually a great deal for Citi, all things considered. Thinking of this as paying 11% in interest is entirely misleading, given that the mandatory conversion provision.

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PRE
addict

Reged: 05/12/07
Posts: 571
Loc: Council Bluffs

Re: who's buying Citigroup [Re: Jimbo]
#13164250 - 11/28/07 11:34 PM

Quote:

Quote:

Too good to be true? The company takes out what amounts to a subprime mortgage, and pays 11% interest. That sure sounds like desparation. Too good to be true, lol.

You are trying to make a complex transaction seem too simplistic.

Jimbo

Maybe, but Citigroup is run by a bunch of morons. Just compare the costs of their recent debt and equity financing to see what I'm talking about.

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stoxtrader
former trader of stox

Reged: 09/26/03
Posts: 2811
Loc: stoxpoker

Re: who's buying Citigroup [Re: PRE]
#13164791 - 11/29/07 12:06 AM

Quote:

Quote:

Quote:

Too good to be true? The company takes out what amounts to a subprime mortgage, and pays 11% interest. That sure sounds like desparation. Too good to be true, lol.

You are trying to make a complex transaction seem too simplistic.

Jimbo

Maybe, but Citigroup is run by a bunch of morons. Just compare the costs of their recent debt and equity financing to see what I'm talking about.

I think when you call the citi mgmt team a bunch of morons, the onus of proof falls on your shoulders, not anyone else. The mgmt team, I daresay, has a pretty good pedigree. there may be slightly more than meets the eye to this transaction.

In any event, I would welcome a post by you with thoughtful reasons to backup your statements.

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RockyElsom
member

Reged: 11/21/07
Posts: 107

Re: who's buying Citigroup [Re: PRE]
#13164919 - 11/29/07 12:14 AM

Quote:

Maybe, but Citigroup is run by a bunch of morons. Just compare the costs of their recent debt and equity financing to see what I'm talking about.

Nice how you call the morons after the fact. Thanks for playing!

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pig4bill
Carpal \'Tunnel

Reged: 12/10/05
Posts: 2658

Re: who's buying Citigroup [Re: Phone Booth]
#13165468 - 11/29/07 12:54 AM

Quote:

Quote:

Too good to be true? The company takes out what amounts to a subprime mortgage, and pays 11% interest. That sure sounds like desparation. Too good to be true, lol.

It's actually a great deal for Citi, all things considered. Thinking of this as paying 11% in interest is entirely misleading, given that the mandatory conversion provision.

Yeah, so that after the conversion, it's highly dilutive. Nice.

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pig4bill
Carpal \'Tunnel

Reged: 12/10/05
Posts: 2658

Re: who's buying Citigroup [Re: stoxtrader]
#13165526 - 11/29/07 12:57 AM

Quote:

Quote:

Quote:

Quote:

Too good to be true? The company takes out what amounts to a subprime mortgage, and pays 11% interest. That sure sounds like desparation. Too good to be true, lol.

You are trying to make a complex transaction seem too simplistic.

Jimbo

Maybe, but Citigroup is run by a bunch of morons. Just compare the costs of their recent debt and equity financing to see what I'm talking about.

I think when you call the citi mgmt team a bunch of morons, the onus of proof falls on your shoulders, not anyone else. The mgmt team, I daresay, has a pretty good pedigree. there may be slightly more than meets the eye to this transaction.

In any event, I would welcome a post by you with thoughtful reasons to backup your statements.

Morons, maybe not. Excessively greedy and imprudent, certainly. Inadequate, or no DD on a lot of garbage paper. And then trying to hide it by putting off the writedowns as long as possible.

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