Citigroup memo launches war of words
Citigroup Inc. brought out the big gun Friday with a pointed memo that lays waste to recent reports of rifts between the company's board and top management.
Board member Richard Parsons, the former chief executive of Time Warner, wrote a memo to all of Citi’s 352,000 employees in which he blasted recent media reports of dissension between directors and top management. He insisted Citi directors and managers are “completely aligned” and believe the firm has “the right talent, the right management, and the right approach.”
“Keep the faith!” Mr. Parsons concluded.
Such words may have helped lift the spirits of employees, of whom 10,000 are soon to lose their jobs and many more certain to follow. But such sentiment didn’t impress investors who pushed Citi’s share price down another 6% in midday trading, to $8.90. The stock is down 70% for the year and trades at levels unseen since 1996, on a split-adjusted basis.
In an effort to lift the stock out of its tailspin, CEO Vikram Pandit last night bought Citi shares for the first time since taking the reins last December. He acquired 750,000 common and 100,000 preferred shares.
Citi, which until recently ranked as the world’s largest bank, now has a market value of just $48 billion—just $2 billion more than Minneapolis-based U.S. Bancorp. The bank has posted $20 billion of net losses over the past four quarters, due in large part to $68 billion in mortgage-related write-downs, and is expected to record yet another quarterly loss in January.
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