Citigroup Falls Short in Quest for $5 Finish

Even a surprise $4.4 billion profit wasn't enough for Citigroup shares to hold $5 through a closing bell this week.
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Updates with Citigroup's closing price.

NEW YORK (

TheStreet

) -- Even a

surprise $4.4 billion profit

wasn't enough for

Citigroup

(C) - Get Report

shares to hold $5 through a closing bell this week.

The stock managed to open above that level twice -- on Tuesday and Wednesday -- but by the time the session drew to a close, it had pulled back each time. Friday was following a similar pattern, as the shares ran as high as $4.95 in early trades, but finished the day down a penny at $4.86. The stock hasn't managed to finish at or above $5 since mid-October.

This week was a pivotal one for Citigroup with its first-quarter report and

annual shareholders meeting

, and the company's stock -- up nearly 50% for the year -- continues to have

good momentum

, despite the damper that the civil fraud charges against

Goldman Sachs

(GS) - Get Report

and

a heightened prospect

of more stringent reform legislation has put on the financial sector.

Despite the pullbacks from $5, Citigroup shares were still up nearly 7% for the week and investor interest has been extraordinary with more than 4.6 billion shares trading hands through Thursday's close. Friday's volume of 760 billion was still well above the issue's trailing three-month daily average of 578 million. Probably the biggest positive takeaway from the company's first-quarter performance is that it showed Wall Street it's not being left behind by rivals

Bank of America

(BAC) - Get Report

and

JPMorgan Chase

(JPM) - Get Report

, even as it continues to restructure and divest non-core assets.

It's also bullish that Pandit's own efforts to

keep a lid on the optimism surrounding the report

didn't get in the way of the stock's steady advance.

On Friday, Citigroup held its fixed income investor review for the first quarter with CFO John Gerspach, and Eric Aboaf, the company's treasurer, speaking with investors and analysts. Independent research firm

CreditSights

said the executives highlighted a decline in the company's short-term borrowings to $97 billion from a pro forma level of $131 billion in the fourth quarter, and said the company reiterated an expectation that it would issue about $15 billion worth of long-term debt in 2010.

On the news front, the company began a tender offer for $1.1 billion in subordinated notes on Friday. Citi said the move was part of its liability management strategy in which it uses available cash in order to retire older vintage debt that is nearing maturity, and noted that it repurchased about $3 billion worth of senior notes in February.

The transaction will not have any impact on Citigroup's structural liquidity nor will it result in any reduction to Citigroup's Tier 2 Capital ratios, the bank said.

All of the debt being retired expires by February 2011. The largest portion, approximately $789.3 million in subordinated notes with a rate of 7.25%, mature this year. Citigroup is offering 102.8% of par value for these U.S. dollar notes. They are listed on the Luxembourg Stock Exchange. The tender offer expires May 6.

--Written by Laurie Kulikowski in New York.