Citi CEO Vikram Pandit blamed short sellers, and not the bank's disastrous balance sheet, for the bank's need to be bailed out in 2008. In Congressional testimony yesterday, Pandit was at least humble enough to thank the American people for the handout, even if he's still playing the blame game.
The US holds a 27 per cent stake in Citi. “Citi owes a large debt of gratitude to American taxpayers,” Mr Pandit said.
His assertion that Citi needed to be bailed out because of short sellers run amok is pretty disingenuous, if you ask me. The shorts were only on the stock because of the abysmal balance sheet. Let's face it, sometimes you're taking a risk on a trade, and other times it's a 3-inch putt. With Citi's loss ratios off the charts, shorting the stock was a no brainer. I guess Pandit figures that if Blankfein could get away with crafting a narrative that GS didn't need to be bailed out (also total bullshit), he might as well have a go at the prevarication business.
While I certainly wouldn't be short Citi any longer, I wouldn't be in a big hurry to go long either. I know a lot of hedgies have layered into the stock at higher prices over the past quarter or so, but with a 27% stakeholder publicly stating that they really can't wait to get rid of the stock that they own at $3.25 a share, I don't see it going much higher any time soon.
it would be perfect to buy citi and sell covered calls, if stock is not going anywhere. take this advantage fellow moneys.
I agree with Edmundo. What about the years of mismanagement, the poorly thought-out acquisitions, the ineffective business model, abysmal risk-management, and over-leveraged bets? I'm pretty sure you can't blame the short sellers for that too....
I don't think Citi is marginable (stocks under $5 a share generally aren't), so a covered call strategy really wouldn't be worthwhile without the extra leverage. Plus, there hasn't been a great deal of volatility over the past few months, so the option premiums pretty much suck.
Short naked puts.
Just ran some quick options quotes on C. What a piece of shit. Absolutely no time value whatsoever. Definitely not a candidate for covered call writing.
I actually just bought Citi at 3.19 a few weeks ago and sold out today, it changed price exactly how i traded it and predicted it (im not saying they all do that, nor am i bragging), but citi is def a stock that can be traded (especially options, but only simple like buying calls and buying puts) as for short sellers, i am disappointed that Pandit would claim such a thing. The only reason why the short sellers were selling short is because the company's number SUCKED, these people don't wake up in the morning and say to themselves "Let's pick a CEO to piss off today ..... Vikram Pandit!!" and start shorting the stock, Pandit is simply looking for somebody to blame, a part of human nature, as well as - at the same time - praising taxpayers for the bailout (he wants them to feel good), killing two birds with one stone...... i grade this one a D- for justifiability and a B+ for managing the act of sucking up.......there's pandit for you
Anytime a ceo blames 'the shorts', it's a good signal to short...eg Erin Callan!
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