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The Right Citigroup Stock Call: Paulson or Soros?

Stocks in this article: C BAC FMBI STI

(Soros-Paulson-Citigroup poll story updated for Treasury sale, Friday trading)

NEW YORK ( TheStreet) -- The past week began and ended with some pretty big financial players revealing details about their stakes in Citigroup (C).

To close the week on Friday, the Treasury Department said that the Troubled Asset Relief Program (TARP) was going to cost the U.S. taxpayer a lot less than previously forecast -- $11.4 billion less, according to a new estimate that the Treasury sent to Congress. U.S. taxpayers enraged by the TARP program blank check written to the banks had one bank, in particular, to thank for the reduced TARP price tag, Citigroup.

The Treasury said on Friday that TARP repayments of $190 billion were higher than previously anticipated, and that its stake of 7.7 billion shares in Citigroup was the primary driver.

The Treasury cited the March 31 Citigroup share price of $4.05 in its Friday announcement -- or 80 cents more per share than the price at which Treasury converted the megabank's preferred stock into common equity.

On April 26, the Treasury said it was selling 20% of its 7.7 billion Citigroup shares. On the day previous to the Treasury sale announcement, Citi shares had closed at $4.86.

Citigroup shares ended this Friday up more than 3% -- though less than some of its biggest bank competitors -- as the financial sector rallied after the Senate passed the financial reform bill, ending the regulatory uncertainty.

The Treasury is not the only major Citigroup investor who has been busy trying to time its sale of the bank's shares as Citigroup rides the long road to recovery, either.

On Monday, another round of 13F filings from the hedge fund heavyweights George Soros of Soros Fund Management and John Paulson of Paulson & Company revealed their quarterly portfolio decisions.

The quarterly update to the public stocks that the hedge fund managers have been buying and selling always attracts a lot of attention, even though the information is backward-looking.

Given the lag on the release of the portfolio information, the stock buys and sells of the hedge fund masters can be most interesting when they are at odds with each other on a particular big name stock, as it turns out, Soros and Paulson were over shares of Citigroup in the first quarter.

In the fourth quarter 2009 quarterly holdings update from both hedge fund managers, released back in February, both Soros and Paulson were trading in the same direction when it came to shares of Citigroup.

Soros bought 95 million shares of Citigroup during the fourth quarter and held $313 million worth of Citi shares at the end of 2009.

Paulson had also bulked up on Citi shares in the fourth quarter 2009, buying an additional 200 million shares, to take his overall stake in Citi to above 500 million shares.

Now the hedge fund managers are at odds. Soros seems to have booked some short-term profits on Citi shares, slashing his hedge fund group's holding from 95 million Citigroup shares to a measly 10,500 shares at the end of the first quarter.

Paulson, on the other hand, kept his Citigroup holding steady in the first quarter with over 500 million shares.

Which hedge fund manager was right?

The Street's Take
Sell Citigroup!: Against the Grain

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