CNBC reported that Citigroup (C) could have a $24 billion write-off. The source for that report is not clear.
Last week, Goldman Sachs said Citi might have to take a charge of $15 billion. That estimate came from three bank analysts. The last number that the bank gave out was $8 billion to $11 billion.
There have been similar dislocations in write-down estimates for Merrill Lynch (MER), Bear Stearns (BSC), Morgan Stanly (MS), and JP Morgan (JPM).
Keeping the press and analysts from guessing the size of write-offs is not possible. It brings analysts a day in the sun and it helps the press get eye-balls. But, it does not do investors any good as they are thrown from one set of numbers to another.
It is still no unusual for Citi’s shares to move 5% up or down in a day. It is too bad that analysts won’t wait for information from the company. The market could be efficient, but not when it is bounced around by rumors and speculation.
Douglas A. McIntyre
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