Citigroup Shares: When to Sell? (C)

Citigroup Inc. (NYSE:C) shares are the most actively traded stock in the world, daily volume hits 432 million, there are no shortage of buyers or sellers for this security.  Citi shares are trading today at $3.86 and Linus Wilson dives into the question many taxpayers are wondering -- when will the government sell its Citi stake?

In 2010 Citigroup (NYSE:C) shares are up 16%, starting the year around $3.25 and last week they finally got back above $4, so when will the U.S. Treasury hit the cash out button and let the taxpayer relax?

(SeekingAlpha.com) The chorus of positive voices about Citigroup (C) has been rising throughout the last couple weeks. Luckily for taxpayers their lockup expires on Tuesday, March 16, 2010. If Tim Geither and company are not completely asleep at the wheel, they would have already hired an investment bank to do a coordinated sale of at least $5 billion of that stake—I would prefer more—before the markets open on Tuesday. There is plenty of room to allow institutional investors a slice of Citigroup.

The U.S. Treasury squandered a good opportunity to exit at least part of their stake by not selling it in the summer and fall. All they have to do is sell at above $3.25 a share to make a profit. They declined to take a modest loss on a $5 billion stake in December. In December, Citigroup completed the largest common equity offering in history of over $19 billion right before the Christmas holiday in the same week that Wells Fargo (WFC) sold over $12 billion. Not selling the government’s stake at a loss may have been the right move in terms of signaling, but to hesitate today when the shares are at about $4 will open the administration to all kinds of criticism.

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SOURCE: http://seekingalpha.com/article/193449-why-geithner-should-sell-citi-stake-this-week