At $1, Citi share worth just a soft drink

At $1, Citi share worth just a soft drink
PTI
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First Published: Fri, Mar 06 2009. 04 23 PM IST
Updated: Fri, Mar 06 2009. 04 23 PM IST
New York: Buying one share of Citigroup will cost its CEO Vikram Pandit his full-year salary — $1, which can also buy a soft drink at any neighbourhood McDonald’s store.
There are, in fact, as many as eight items available at the US outlets of McDonald’s for $1, which is now the price of one share of Citigroup — the global financial behemoth having assets worth about $2 trillion.
In the previous trading session at New York Stock Exchange (NYSE), Citi shares plunged by 10% to hit a sub-$1 low of 97 cents, before closing at $1.02.
This marks a sharp plunge from its 52-week high of $27 and over $50 a share before Pandit took over in December 2007.
With this sharp plunge, Citi has got the dubious distinction of being among the cheapest blue-chip stocks and probably the only one in the benchmark Dow Jones Industrial Average index stocks worth just about $1.
It is, however, closely followed by struggling carmakers GM and Ford, whose prices are now below $2.
For $1 — also the annual salary of Pandit — a plenty of products are available outside stock market, including some mouth-watering items at McDonald’s.
The budget restaurant chain has as many as eight $1 products on its menu — McChicken and McDouble burgers, a pack of fries, a plate of pies, a glass of soft drink, one hot fudge sundae, one plate of salad and fruit & yogurt perfait
At the current market price, the market capitalisation of Citi is around $5.6 billion.
With Citi price touching 97 cents in the intra-day trade on Thursday, the shares have touched the lowest level ever since 1998, when Citicorp and Travelers Group merged to form the Citigroup.
Battered by the raging financial crisis, Citi has been in the red for five straight quarters of losses, incurring total losses of more than $37 billion.
Citi has also received three lifelines from the US Federal government in recent months which includes fresh capital injection to the tune of $45 billion.
Last month, US agreed to convert its preferential stocks in the firm into common shares, a move that would make the government a 36% shareholder in the financial services entity.
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First Published: Fri, Mar 06 2009. 04 23 PM IST