Thursday, February 26, 2009

Citigroup Announces The New Deal

It appears the Government is willing to further waste American tax dollars. In a scheme hatched to eliminate any real claim Americans have in Citigroup, federal regulators have expressed a willingness to convert already owned preferred shares in Citigroup to common stock.

The real problem with converting to common stock is that it will become worthless when Citigroup goes through bankruptcy. Who benefits when we convert preferred stock to common stock? Preferred stock has benefits beyond voting and or dividends. Many times preferred share holders are first on the list when dividends are distributed and they are not diluted when additional common shares are disbursed.

I do not know all the structure details for Citigroup preferred shares. The point here is that preferred shares are worth far more than common shares in this economy. Anyone who would agree to a conversion at this point would have to be a complete idiot or a criminal claiming to act in the best interest of the American public. Unless Americans are guaranteed greater than 51% collective stake in Citigroup we should keep our current preferred or sell our preferred position to another entity.


Under no circumstances should our current preferred stake in Citigroup be converted to common stock! It would be an act of waste fraud and abuse to do so!

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