shares were surging nearly 20% Friday, as they continued their rally from last week's lows.
Citi shares have been rising all week after Treasury on Monday bailed out the New York-based bank by injecting another $20 billion in preferred equity from the
. The capital injection was on top of an earlier $25 billion investment. Federal regulators also agreed to backstop $306 billion in risky assets.
Citi's stock had fallen 60% last week, prior to the bailout, on concerns about the viability of the global banking titan.
Citi had announced on Nov. 19 that it was moving roughly $17 billion of obscure assets housed in off-balance sheet Structured Investment Vehicles (SIVs) back onto its books. Investors became concerned about what other toxic exposures
might be hiding, particularly since Treasury had also announced last week that it was scrapping its original plan for TARP, in which it would buy bad assets from the banks.
The steep fall in stock price led Citi's largest shareholder, Saudi
to increase his stake in the company to 5%, and issue a statement supporting Citi's management and strategy last week. But the Prince's vote of confidence was not enough to stop Citi's shares from sliding, forcing the government to step in over the weekend.
The bailout was a dramatic change in events for Citi, which just last month was engaged in a bitter legal battle over the ownership of
. Citi had agreed to purchase Wachovia's banking operations, with federal assistance to offset anticipated losses in the Charlotte lender's portfolio. But
swooped in with a better offer, one that did not require federal assistance, to seal a deal for Wachovia.
Citi also had been rumored to be looking at smaller institutions for acquisitions, but any deal is likely to be tabled for now given its recent stock price troubles.
The stock was recently up 19% to $8.39 on Friday.