Stocks in the news: Citigroup, Dell, Ford

Citigroup (C) shares are in a free fall in pre-market, diving about 45% after the U.S. government did a deal to convert $25 billion of its preferred stock in the beleaguered bank to common stock, giving it a stake of up to 36 percent in the bank.

Other banks are dropping on Citi news: Bank of America (BAC) skidded 21 percent and JPMorgan (JPM) slid 6 percent in pre-market trading.

In Europe, too, banks are slumping. Lloyds Banking Group's (LYG) U.S. shares meanwhile plunged 20 percent as it didn't reach an agreement with the U.K. government to insure assets. Lloyds reported Friday that profits shrank to 819 million pounds in its Lloyds TSB unit in 2008, while the recently acquired Halifax/Bank of Scotland lost 7.5 billion pounds ($10.6 billion) over the year. Meanwhile, Royal Bank of Scotland Group (RBS), which did reach a deal with the U.K. government Thursday, also saw its shares dropped more than 14 percent.