Feds Look to Unload Citi Stake, Collect $8B
Dumping 27% stake would be 2nd-largest offering ever
By Polly Davis Doig,  Newser Staff
Posted Mar 27, 2010 9:04 AM CDT
Specialist Patrick Murphy, left, and trader Christopher Fuchs, with Citigroup Global Markets, confer on the floor of the New York Stock Exchange.   (AP Photo/Richard Drew)
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(Newser) – At the time, throwing scads of cash at crumbling banks looked risky. But now it's financial genius as the Obama administration looks to unload its stake in Citigroup—and collect a tidy $8 billion profit in doing so. The transaction, which the Washington Post reports will be the second-largest stock offering ever, will cut nearly all TARP ties between Citi and the government, which holds a 27% stake.

Citi's stock has gone from around a buck a share a year ago to $4.31 yesterday—which means the feds' $25 billion stake, negotiated at $3.25 a share, has grown to $33 billion. "It's unprecedented to do [a stock sale] of this size right after the financial industry has been so battered," says an anonymous industry official. "It's just a very bullish sign."