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-   -   who's buying Citigroup (http://archives1.twoplustwo.com/showthread.php?t=555754)

cwsiggy 11-27-2007 05:54 PM

who\'s buying Citigroup
 
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???

mmctrab 11-27-2007 07:08 PM

Re: who\'s buying Citigroup
 
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.

cwsiggy 11-27-2007 09:39 PM

Re: who\'s buying Citigroup
 
[ 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.

[/ QUOTE ]

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

mmctrab 11-27-2007 10:25 PM

Re: who\'s buying Citigroup
 
I dunno. Their management says they're not going to cut the dividend, but who can tell for you.

pig4bill 11-28-2007 04:59 AM

Re: who\'s buying Citigroup
 
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.

cwsiggy 11-28-2007 01:43 PM

Re: who\'s buying Citigroup
 
Up $2 - someones' buying. lol see how easy that trade was.

Jimbo 11-28-2007 04:14 PM

Re: who\'s buying Citigroup
 
[ 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.

[/ QUOTE ]

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

Jimbo

Phone Booth 11-28-2007 04:21 PM

Re: who\'s buying Citigroup
 
[ 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.

[/ QUOTE ]

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.

PRE 11-29-2007 12:34 AM

Re: who\'s buying Citigroup
 
[ 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.

[/ QUOTE ]

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

Jimbo

[/ 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.

stoxtrader 11-29-2007 01:06 AM

Re: who\'s buying Citigroup
 
[ 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.

[/ QUOTE ]

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

Jimbo

[/ 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.

[/ QUOTE ]

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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