In the third bailout of Shitty Bank oops Citibank, the U.S. Treasury Department plans to convert $25 billion of its preferred securities into common stock provided other private holders agree to the same terms.
If the latest round of bailout goes through, the U.S. government’s stake in Shitty Bank will rise to 36% from 8% and and wipe out the stake of existing shareholders by 74%.
Horrible for small investors across America who thought Citi was a safe haven. Citi is also suspending dividends on both preferred shares and common stock.
It’s beyond disgusting to see the greedy swines on Wall Street get yet another bailout when they should have all been marched off to jail for the widespread destruction they’ve caused.
The pigs of Wall Street took home tens of millionsÂ in pay and bonuses and this disasterÂ is what they gave us in the end.
Under the latest effort to save Citi, besides letting the U.S. government exchange $25 billion of preferred stock for common shares Citi will also offer to exchange common stock for up to $27.5 billion of preferred securities held by private investors and the public.
By issuing common stock in exchange for preferred securities, the Vikram Pandit-led Citi hopes to increase its tangible common equity (TCE) to a level that restores investor confidence in the bank.
The bozos at Citi think the deal could increase the TCE of the company from the fourth quarter level of $29.7 billion to as much as $81 billion.
Expect Citi shares to crash today once Wall Street opens for trading (they are already down sharply in pre-market trading).
The U.S. has already pumped in $45 billion into Shitty Bank.
Citigroup will reconstitute its board to have a majority of independent directors.
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