The Citi Plunge Continues

Citigroup is now worth less than $100 billion, and is trading at about 85% of its book value of $20.73 per share – $17.73, to be precise, at just after noon today. Goldman Sachs analyst William Tanona now has Citi on his "conviction sell" list, although his six-month price target, of $16 a share, doesn’t seem very far away at all, given that the bank was trading over $50 this time last year.

The problem with Citi, I think, is not that it’s too big to fail, but rather that it’s too big to rescue. If Qatar comes in and buys as much as $8.9 billion in Barclays stock, that makes a difference. But $8.9 billion is pretty much Tanona’s estimate for Citigroup write-downs in the second quarter alone.

The Sandy Weill Family Foundation and other former white knights at this point seem just too small to be able to inject enough capital to keep Citi’s head above water; even the outright abolition of the dividend might not be enough. And there’s certainly no one big or foolhardy enough to buy Citi. Which means Citi’s only hope is that Vikram Pandit is capable of turning this supertanker around. And that, if you ask me, isn’t much of a hope at all.

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