Updated from 1:29 p.m. EST

Citigroup

(C) - Get Report

shares plummeted 20% Friday, as the ailing bank mulled the sale of all or parts of its businesses.

Citi shares on Friday fell as low as $3.05, a 52-week low, before closing down 94 cents to $3.77 amid a nearly 500-point rally in the

Dow Jones Industrial Average

. The market capitalization of what was, just a few months ago, the world's largest bank fell to less than $20 billion at its nadir. Not only is that less than the $25 billion preferred equity investment the government last month, but its far less than Citi's $657 billion in deposits, according to its most recent quarterly filing with the

Securities and Exchange Commission

.

With the stock price and market cap so low, Citi is going to need to act soon, but selling businesses may not be so easy in a public marketplace that is assigning virtually no value to the ailing company

"With the markets as volatile as they are, anything can happen -- and that's the problem right now," says Alois Pirker, a senior analyst with Aite Group. "While

Citi looks stabile and secure, we don't know what happens tomorrow."

The Wall Street Journal

reported on Friday that Citi executives have began weighing the possibility of auctioning off pieces of the financial giant or even selling the company outright. But what kind of value could Citi expect to reap from breaking up and selling its businesses, when the market seems to be placing such little value on the whole?

"If you're trying to break up something when you're in distress, you're not going to get the type of fair intrinsic value," says Jaime Peters, an analyst at Morningstar.

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The highly profitable Smith Barney brokerage would be the easiest asset for Citi to sell, Peters says. It has "an excellent name brand" and "some very valuable clients," Peters says. "It's a real gem inside Citigroup. It's the easiest thing to look at and say that's attractive."

Peters says that other asset management firms, brokers and private-equity firms would be interested in acquiring Smith Barney, and likely more in a position to acquire rather than another global bank, most of which are struggling themselves.

The problem is that in a tough market, "it would not sell at the price that Citigroup would want for it," Peters says.

Citi's deposit base, particularly outside of the U.S., is also attractive. Banks, including Citi, have been scoping out acquisition targets in order to obtain more deposits as the capital markets remain frozen. The deposits provide a cheap source of funding for the banks.

Besides its deposits, Citi's fee businesses, including wealth management and transactions services, are the most attractive pieces of the pie.

Pirker notes that the firm's transaction services, while profitable is not core to Citi. He added that the firm's Japanese brokerage unit Nikko Cordial is another attractive business line.

A sale of the entire firm is unlikely, but plenty of "cherry picking" is likely, Pirker says.

"The problem is now what are the valuable pieces. In these times it's just so difficult to say because who would have thought that

Merrill Lynch

( MER) would go as it did?" he notes.

Morningstar's Peters says changes due at the beginning of the year to purchase accounting rules will require acquiring firms to essentially mark the entire balance sheet to market at the time the deal closes. Marking Citi's balance sheet to market, given the toxic assets and loans it has on its books "would require a ton of equity a buyer would have to inject into Citigroup," she says.

"That's just not possible," she says. "Nobody has that much equity to spare."

It was just a week ago when Citi was a buyer, not a seller.

After failing to complete a deal to purchase

Wachovia

(WB) - Get Report

last month, Citi set its sights on smaller acquisitions and has had acquisition talks with Bethesda, Md.-based

Chevy Chase Bank

and

Valley National Bank

(VLY) - Get Report

. On Thursday

Reuters

reported that Citi is now one of several bidders for Chevy Chase Bank, along with

JPMorgan Chase

(JPM) - Get Report

and

Capital One

(COF) - Get Report

.

Government largess has not been much help for the ailing bank. Citi was one of the nine largest U.S. banks to receive the first round of preferred equity investments the federal government made through the Troubled Assets Relief Program, or TARP. It was one of four banks, also including JPMorgan Chase,

Bank of America

(BAC) - Get Report

and

Wells Fargo

(WFC) - Get Report

, to receive $25 billion from the government, the largest investments made through the program.

The confidence boost from the government hasn't done any of the banks much good of late. All were traded at or below 52-week lows Friday, before rebounding slightly in the late afternoon rally.

Citi's internal discussions about a possible sale are at a preliminary stage and don't signal that Citigroup's board and management are backing down from their insistence that the New York company has ample capital, funding and strategic direction, the

Journal

reports, citing people familiar with the matter.

CEO Vikram Pandit wants to keep the company together and is loathe to spin off its Smith Barney unit,

CNBC

said.

Pandit spoke on an internal conference call, adding that "rumor mongering is at the heart of our problems," according to the cable news station. Pandit said that Citi's capital position is very strong.

"Citi has a very strong capital and liquidity position and a unique global franchise," Citi said in a statement. "We are focused on executing our strategy, including our targeted expense and legacy asset reductions, and we believe the benefits will be seen over time."

The company declined to comment on any speculation of a sale.

Pirker says that while Citi's claims about its strong capital position are "good news," an extended downturn in the market is "going to kill them because they are already have a ton of writedowns and that's the problem that really put them in this position."