Citigroup (NYSE:C) is back in the spotlight once again. After plummeting to near penny-stock status, then rebounding, this banking stock became the darling of the hyper active high frequency trading brigade. The robot traders had a ball with Citi’s deep liquidity and ultra tight spreads. However, this algorithmic army quickly lost interest in the stock when Citi instituted a 10-for-1 reverse split pushing the share price above $40 per share. This strategic move knocked the high frequency trading boys out of the game, but may create more long term institutional interest in the financial stalwart.
Now, perhaps the most interesting Citigroup rumor of all, has hit the underground secrets media network. The Oracle of Omaha Warren Buffett’s juggernaut acquisition machine Berkshire Hathaway (NYSE:BRK) may be part of a consortium to purchase Citi’s troubled consumer finance division, One Main Financial. Pre-financial bust, this unit was known as Citi Financial.
Center Bridge Partners and Leucadia National Corp. (NYSE: LUK) are also rumored to be part of the buyout group. Interestingly, One Main only has a book value of $2 billion but may obtain a bid in the $8 billion range due to its extensive asset base. Citi has been in talks for the last several months about spinning off this division, but this is the first time that Buffett has been involved. The star power of the Oracle combined with his mountain moving resources may just be the impetus Citi needs to actually flip this troubled unit away from itself. Time will tell, watch this one closely! Read more
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