You’ve got to be kidding me? After providing more than $40 billion in “support” funds to Citigroup during the first round of bailouts, they determine that it’s not working out too well.
Here is the news from an AP business writer on Yahoo News, with my emphasis added.
The U.S. government will exchange up to $25 billion in emergency bailout money it provided Citigroup Inc. for as much as a 36 percent equity stake in the struggling bank.
The deal announced Friday — the third attempt at a rescue plan for Citigroup in the past five months — is contingent on private investors also agreeing to a similar swap.
Malkin rightly refers to this as an EPIC FAIL.
Another day, another multi-billion-dollar bank bailout.
The Treasury Department is back with a half-baked plant to soak up 36 percent of ailing Citigroup. Because the first $45 billion worked so well!
The deal will convert nearly worthless common stock into preferred shares, put the taxpayers’ stake in the company at nearly 40 percent, and continue the borrow-spend-panic-bailout-repeat cycle.
Instant verdict: “Shares of Citi tumbled 56 cents, or 22.7 percent to $1.90 in premarket trading.”