Fri 21 Nov 2008
The billionaire Saudi prince, who invested in Citicorp in 1991 when it was in financial straits, said he would raise his stake from 4 per cent to 5 per cent. At Citi’s current market value of just over $25bn, the new investment would cost about $350m.
The 26.4 per cent fall in the shares, which closed at $4.71 in New York, prompted Citi’s directors and executives to look at strategic options, includes selling part or whole of the company.
A $350m vote of confidence from Saudi prince Al-Waleed Bin Talal could not halt the rapid decline in the fortunes of Citigroup yesterday, with fears mounting that what was once the world’s biggest bank will lack adequate capital to withstand the billions of dollars of losses expected in the months to come.
The £236m investment came before the market opened yesterday, and reversed the nose-dive in the ailing bank’s share price for only 20 minutes before the sellers returned. It had been hoped that the boost in sentiment from Al-Waleed’s vote of confidence would end a two-year selloff that has wiped more than $200bn from Citigroup’s market value.
But as quickly as the share price had improved, it declined again. At one point it plunged by more than 25% to less than $4, its lowest since 1994. By the close on Wall Street it was off by more than 26% at $4.71, giving the bank a puny market value of $25bn.
In January 2007, Citigroup shares were worth more than $54 each and the company was valued at more than $250bn.
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