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Frantic Citigroup Considers Sell-Off

Merger or sale become options as bank scrambles to stop the drop

By Rob Quinn, Newser Staff

Posted Nov 21, 2008 4:20 AM CST

(Newser) – Citigroup is keeping all its options on the table as its share price plunges—including selling itself, insiders tell the Wall Street Journal. The battered giant's share price plummeted another 26% yesterday—its worst one-day hit ever—chalking up an 83% dive for the year. Directors plan crisis talks today.

Citigroup's chief insists the bank is still stable and is strongly opposed to a sell-off—but the steep slide has made once-unthinkable options a possibility. Analysts believe Morgan Stanley and Goldman Sachs are likely candidates for a Citi merger, but brutal market conditions mean suitors will be more inclined to pick off Citi's more lucrative units, rather than swallow it whole.

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An office tower bearing the Citigroup logo in Queens. (AP Photo/Seth Wenig)

People walk by a newspaper poster headlining job cuts at Citigr in London's financial district. (AP Photo/Sang Tan)

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We're getting to the critical doomsday question: What happens when a megabank like Citi fails? The biggest banks are not just important to the banking system, they are the banking system.
- Martin D. Weiss, founder of Weiss Research.

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Frantic Citigroup Considers Sell-Off