New York, November 22: The ‘invincible’, ‘too big to fail’ Citigroup is reeling under a severe crisis. Its share price is at a 16 year low and the group has lost close to $160 billion since last year.
Given the circumstances, government has to lend a helping hand to save the ‘Financial Titanic’ from sinking.
The run on the Citi’s stock has turned out to be a full-blown crisis. The financial giant’s to executives are looking at various options to stem the rot.
The options include selling the entire company or a portion of it, a public endorsement from the government and financial help from the treasury. Whether Citigroup chief executive Vikram S. Pandit will be asked to leave also remains a hot topic of discussion.
The beleaguered CEO held a company-wide call on Friday to shore up the confidence of fretful personnel. Board members held a series of tense meetings and telephone calls to assess the situation and find a way out of the quagmire. Treasury secretary Henry M. Paulson Jr. and the president of the Federal Reserve Bank of New York, Timothy F. Geithner were also consulted.
The New York based Citigroup has a huge global presence, is too interconnected and unfortunately faces an uncertain future. It must find an immediate solution to calm apprehensive shareholders, otherwise the company might just go bust.
Meanwhile, Citi Group is set to reassure its clients with a new set of advertisements, to be rolled out in major markets in the U.S. and overseas. The theme of these advertisements will be "Providing stability" and "securing the future".
Citi has gone a bit ahead than "The Citi never sleeps" campaign. The new advertisement reads, “Now, more than ever, you can feel confident that Citi never sleeps."
However, Randy Frederick, director of trading and derivatives at Charles Schwab & Co said, "people will stop wanting to do business with Citi. They'll perceive the company's position as being reflected in its stock price, regardless of what management says."
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