This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

U.S. Could Take Larger Stake in Citi: Report

Stocks in this article: C BAC

Updated from 12:20 a.m. EST

Citigroup's (C) investors may be relieved that the banking institution is not being fully nationalized, but that doesn't mean the company won't suffer from being under tighter government control.

The Wall Street Journal reported late Sunday that the company is in talks with federal officials that could result in the U.S. government substantially expanding its ownership of the bank to as much as 40%, citing people familiar with the situation.

In its proposed plan to regulators, Citi executives hope the stake will be closer to 25%, these people said, the Journal reports. But there is the possibility the talks could fall apart, the Journal adds.

Shares of Citi jumped as high as 27% on Monday, before closing up 9.7% to $2.14. Investors seemed calmed by the fact that a larger government equity stake "could be a better outcome than a full nationalization as some have feared," Jason Goldberg, an analyst at Barclays Capital, wrote in a note.

Still at it current stock price, Citi has just two choices -- nationalization or additional government intervention, says Morningstar analyst Jaime Peters. " T here seems to be zero way that the company can make it on its own with its current stock price," she says.

"The positive is going to be a firmer capital base, which should in turn induce more customer confidence" in the company, she says. "That seems to be the only major reason to do this."

Still, "there is a difference between a 40% stake and actual nationalization," Peters says. "This is not nationalization." Rather, the government is taking baby steps toward nationalization in hopes that the economy will stabilize before it is forced to do so, she says.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs