Staying Short Citigroup

I have read many astute articles in the past few weeks about why Citigroup is worth significantly more than current prices. Hedge fund analysts have very convincing spreadsheets showing that Citigroup could easily double. Dick Bove said the shares could go to $25.

I do not have the skills to be able to determine what Citigroup is worth as the balance sheet is perplexing and figuring out what business they are in is even more perplexing. Taking their word on their book value and plugging in profit margins that are higher than those they were earning before the financial crisis does not cut in my book.

So what do I know about Citigroup? I know that as of two weeks ago the government had over $20 billion worth of shares to sell and that they are actively selling. I know that few people really know what they are worth.

As long as the government is selling shares and they are still above the governments buy price of $3.25, the wind is at my back as there is a huge seller. Most of those who are pounding the table have already committed themselves at higher prices and could easily turn seller.

1 comment:

Anonymous said...

Remember a lot of people are watching 1040.