Some fifty-two thousand job cuts, an all-time-low in the bank’s 13-year streak of being US’ number two bank, and a whole lot of losses – Citigroup goes down in an earlier round and it seems that they just can’t get enough.
They actually plunged deep down already in 1987 – an unimaginable 21.7 percent drop or “crash” in just one day – and still, they haven’t learned their lesson.
Last night, it all comes to a full circle as Citigroup’s shares lost 70 cents to $5.70 considering that there are rumours that the Saudi billionaire and Prince Alwaleed bin Talal will be raising the stakes in the bank to five percent.
Now, the real danger is just around the corner for the bank – the contingency of losing credit card holders as well as mortgages.
Despite the efforts of the bank of cutting down costs via retrenchment, investors were still left neither unimpressed nor unmoved by the dramatic episode.
Now, Citigroup and its actions are being watched by the world. Furthermore, Cabot Money manager William Larkin added, “People are looking at their [Citigroup’s] business model and wondering how on earth they’re going to be able to survive.”
Investors from Asia have been consciously watching Citigroup because of its wide coverage of operations in the continent. In Singapore, Citigroup is one of the largest employers, having over 9,000 people in its workforce.
Also, it is also worth noting the fact that all other banks would be affected by Citigroup’s fallout because of its large transactions with them.
In the end, portfolio Manager William Smith advises investors to break up ties to the bank as it would eventually turn into “another AIG” – a bank that was bailed out and was given US$150 billion to be able to continue its operation while selling its assets to compensate for the losses it incurred.