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...Wall Street Journal has reported that Citigroup (C) and Bank of America (BAC) have done poorly on their "stress tests". Each bank may be encouraged to raise more capital. As a number of analysts have pointed out, private equity has no interest in stakes in troubled banks even at a steep discount to their current market values. To help improve banks' capital bases, the Administration will almost certainly have to take the money it has given and is about to give to banks, and convert it into common stock. That will crush current shareholders and it will create the problem...

Author: /time Magazine | Title: If the Government Owns the Car and Bank Industries, How Does It Get Money Back? | 4/28/2009 | See Source »

...favors. Should the economy gets worse, the amount of the government's ownership, and its exposure, will grow as it protects its investment and support of "strategic" industries with more capital. It is not far-fetched to believe that the Fed could end up having a 50% stake in Citigroup...

Author: /time Magazine | Title: If the Government Owns the Car and Bank Industries, How Does It Get Money Back? | 4/28/2009 | See Source »

...Citigroup (C) is the most shorted stock in America. As of April 15, the bank had a short interest of 1.237 billion shares. Its trading volume average of the prior two weeks was 532 million shares a day. Citi has an extraordinary 24% of its float sold short, a sign that a huge number of investors are willing to gamble against the share price. Citi's stock is subject to wild swings, in part because the short sellers in the company's shares have been "squeezed" more than once this year - forced to cover when the banks had good news...

Author: /time Magazine | Title: The Top 10 Stocks for Short Sellers | 4/27/2009 | See Source »

...billion of outstanding debt for the second time. The bondholders had earlier agreed to accept $4.5 billion; on Friday they reduced the amount further, to $3.75 billion. A final deal with creditors much be reached by May 1. Among Chrysler's biggest bondholders are JP Morgan Chase, Citigroup, Goldman Sachs and Morgan Stanley. Even if Chrysler reaches a deal with its major creditors it may still decide to enter Chapter 11 as a way to further clean up its balance sheet...

Author: /time Magazine | Title: Chrysler and General Motors Make New Bids to Survive | 4/27/2009 | See Source »

...half-a-billion-dollar settlement with Wall Street's stock analysts. As you might recall, investment banks had a bad habit of issuing overly rosy opinions of companies, particularly the ones the banks were courting for other sorts of business. Twelve companies, including Merrill Lynch, Bear Stearns, Citigroup, Goldman Sachs, Lehman Brothers, J.P. Morgan Chase and UBS agreed to pay a collective $432.5 million for research to be produced by dozens of independent, outside companies and distributed to the banks' own customers, as a counterweight to their internal opinions. This money, designed to be disbursed over the course of five...

Author: /time Magazine | Title: Wall Street Stock Research: Soon, Less Independent | 4/25/2009 | See Source »

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