NEW YORK (

TheStreet

) -- When the Treasury Department tether came off

Citigroup

(C) - Get Report

shares last week, the government booked a handsome profit on its bank bailout investment, but that wasn't the only positive result.

The government sold its remaining stake of 2.4 billion Citigroup shares at a price of $4.35 per share, and booked a total profit of $12 billion. The more important development for the Street take on Citi shares, though, is that the government exit means it's time for embedded upside in the bank stock to be realized.

There was no surprise in the government turning a profit on its Citigroup bailout. Last May, the government began issuing better-than-expected estimates for the TARP total price tag and told the unhappy U.S. taxpayer to thank Citi, even if they still hated TARP as a concept. At the height of the government's Citigroup ownership, Uncle Sam held 7.7 billion Citi shares, and the Treasury said all along that its Citi stock exit would be the biggest payday for the U.S. taxpayer in its bailout of the financial industry.

Now the question of profiting from Citi shares turns back to the average investor. With the Treasury out of the picture, Citi shares gained throughout last week and are gaining again on Monday morning.

Citi shares had closed at $4.45 last Monday at the time of the government announcement. By Friday, Citi shares closed at $4.77, for a near-9% gain last week. On Monday morning, Citi shares were up again, above the $4.80 mark and at the bank's highest share price since it touched the $5 mark last April. The government exited its remaining Citigroup shares at a price of $4.35. The government paid the equivalent of $3.25 a share for its massive stake in Citigroup.

For the year, Citigroup shares are up 45%.

That's just the beginning for Citi's rebound, according to Street bulls who think $5 is coming sooner rather than later.

Of the 23 analysts covering Citi shares:

12 analysts rate Citi a buy -- 4 a conviction buy

8 analysts have Citi at a hold

3 analysts recommend selling Citi shares

One simple bullish take on the final Treasury sale of its Citi stake came from Deutsche Bank, which argued last week that it's a positive for Citi in the simple sense that the "lead balloon" has been removed from the bank's shares.

In a related argument, Sandler O'Neill noted that the exit of the government from Citi shares will lead to increased institutional ownership, another positive for the bank stock. Part of the institutional take is that more equity indexes will be buying Citi shares with the government out of the picture, meaning more fund managers holding Citi shares.

Other analysts have noted that the removal of the government overhang on Citigroup shares could free up the bank to pay a dividend or buyback shares, all enticements for the Street and investors to hike the bank's valuation.

Indeed, after last week's bullish action in Citi shares and the government's farewell Citi sale, it raised the question for investors interested in making a play in the heavily traded bank stock,

Where will Citigroup shares trade by the end of 2011?

We asked readers of

TheStreet

to place their bets on Citi shares and the results from the poll were resoundingly bullish, and very close to the breakdown of the analyst position on Citi.

It's not just the 12 analysts who rate the bank stock a buy, or the institutional investors who may now rebuild a Citi position with the government gone, but investors by and large who are betting that Citi shares will surpass the $5 mark.

In fact, a $5 Citi share price just be a pit stop on the way higher, according to the poll, with 33% of investors taking the poll think that Citi shares will trade between $5 and $6 in 2011.

This wasn't nearly a bullish enough stance on Citi shares for this Wisdom of the Crowd group of investors, though. Approximately 61% of investors believe that Citigroup will surpass the $6 mark in 2011.

Only 5% of poll respondents think that Citi shares will remain in a range between $4 and $5 even with Uncle Sam freeing the bank from its involvement.

As for things getting worse for Citi, only 1% of poll takers hold the pessimistic view that the government got out of Citi while the getting was good, and the bank's shares will actually fall below the $4 mark next year.

-- Written by Eric Rosenbaum from New York.

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