Citigroup (C) may be looking at another $7 billion in write-offs and will probably have to raise $11 billion in new capital. If Morgan Stanley’s analysis about the big bank is right, Citi shareholders could face significant distribution.
Citi could sell assets to bring in the capital, but, in theory, that should kill share value, too.
Citi now has a market cap of $110 billion. A convertible preferred or common share sale would tend to take about 10% off the current price of $20.
Citigroup shares are off 5% today. If Morgan Stanley is right, they should be lower.
Douglas A. McIntyre
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Citigroup (C) may be looking at another $7 billion in write-offs and will probably have to raise $11 billion in new capital. If Morgan Stanley’s analysis about the big bank is right, Citi shareholders could face significant distribution.
