When announcing it wanted to leave government oversight by repaying its $20 billion TARP bailout, Citigroup said it would raise the money by selling stock. However, because it sold $17 billion worth at $3.15/share—less than the $3.25/share the government paid for the stock last year—the U.S. Treasury is delaying the sale of its stake.
The NY Times reports, "The turnabout represents a significant setback for [Citigroup CEO Vikram] Pandit and his efforts to free Citigroup from government control. It also underscores the lingering worries over Citigroup’s financial health, as well as concerns that federal officials may have let Citigroup exit the bailout program too soon."
An analyst told CNBC that the stock offering was "terrible deal for shareholders, Vikram Pandit should have never done this thing... [It offers] no positives for shareholders" and thinks that Pandit just wants to get away from executive pay restrictions.
