Once mighty Citigroup trades below $1

Before you go, we thought you'd like these...
Before you go close icon

Just after 11.35 AM today, Citigroup (C) traded below $1. Its market cap is now only $5.3 billion. In June 2007, the stock was close to $54.

Citi became the latest of the iconic American financial companies to become a penny stock. AIG (AIG), Fannie Mae (FNM), Freddie Mac (FRE), and MBIA (MBI) have all traded for under $1 for months.

Citi was built by Sandy Weill, whose goal was to create a massive financial operation which did business in virtually every country in the world and served everything and everybody, from retail investors to the largest corporations with a commercial bank, brokerage operation, insurance company, and investment bank. It was never clear why having all of these businesses under one roof made sense. Weill's dream was never backed up by clear and convincing reason.

Citi ended up cutting its own throat, along with the likes of Merrill Lynch and Lehman. It was willing to leverage its balance sheet by purchasing derivatives that were supposed to be safe and carried triple-A credit agency ratings. But mortgage-back securities lost their value rapidly as the housing market imploded. Citi and it peers made a terrible call about the risk of the derivatives, and are now paying the price.

All that may be left for Citi now is for the government to take it over and auction off the pieces that Weill put together.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Read Full Story

Markets

S&P 500 2,389.36 15.21 0.64%
DJIA 21,002.04 238.15 1.15%
NASDAQ 6,028.46 44.64 0.75%
DAX 12,467.04 12.06 0.10%
NIKKEI 225 19,079.33 203.45 1.08%
HANG SENG 24,455.94 316.46 1.31%
USD (per EUR) 1.09 0.01 0.62%
USD (per CHF) 0.99 0.00 -0.25%
JPY (per USD) 111.08 1.45 1.32%
GBP (per USD) 1.28 0.01 0.43%

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Cops Catch Up To A Suspicious Speeding Vehicle - And Make An Appalling Discovery Inside Cops Catch Up To A Suspicious Speeding Vehicle - And Make An Appalling Discovery Inside
If You Find One Of These In Your Yard, Don't Touch It - And Try Not To Panic If You Find One Of These In Your Yard, Don't Touch It - And Try Not To Panic
Don't Get Too Close To a Newborn Giraffe Unless You Want to Get Kicked in the Nuts Don't Get Too Close To a Newborn Giraffe Unless You Want to Get Kicked in the Nuts