NEW YORK (

TheStreet

) --

Citigroup

(C) - Get Report

shares were rising early Friday amid ongoing speculation that the company is prepping an equity offering in order to repay TARP funds.

Shares have fallen 4.6% so far this week, and the stock's recent run of three consecutive closes below $4 is the first time the shares have done that since mid-August. The stock was trading up 6 cents, or 1.4%, to $3.92 in early action on Friday. Volume of late have been running below the issue's three-month daily average of about 467 million shares for the most part. The exception was Wednesday in which 552 million shares traded hands.

Multiple media reports this week have said that Citigroup was getting ready to launch a capital raise, perhaps by today and possibly to the tune of as much as $20 billion, in order to repay its outstanding bailout funds.

Citigroup received $45 billion from the U.S government in late 2008. Through a conversion of $25 billion of preferred shares, the government now owns about one-third of Citigroup's common equity, which is theirs to decide when and how to sell the shares. But Citigroup can repay $20 billion in trust-preferred securities it has under the TARP program. (Citigroup has another $7 billion tied to an asset-guarantee agreement it has with the government as well as warrants held by the government.)

Concerns about how much

TheStreet Recommends

dilution

would occur in any offering have been prevalent since the reports surfaced.

The latest coverage says the company's negotiations with the U.S. government to repay the funds may not come until after the holidays. Citigroup was apparently pressuring regulators to get a deal done by next week, especially since

Bank of America

(BAC) - Get Report

completed its repayment of $45 billion in bailout funds on Wednesday, but that timetable is very tight.

Observers have differed in whether they think that

Citigroup

should rush to repay the bailout funds as soon as possible. After all, Citigroup is still saddled with troubled assets and bad loans, perhaps more so than any other large bank.

--Written by Laurie Kulikowski in New York.

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