The US government has finally unloaded the last of its investment in Citgroup. Shares of Citigroup surged 3.82% to end the day at $4.62.
The big bank has been a poor investment over the years due to its mismanagement and confusing business model. The company is a leaner organization than it was before the financial crisis. Shares of Citigroup have performed quite well despite the government’s huge position in the company. This bailout worked out well for both the governement and Citigroup.
The government received made a $12 billion dollar profit on its $45 billion dollar investment. That’s a 26.6% return on investment. Citigroup has been stabilized and its stock has rallied about a dollar a share over the last year.
Things should continue to improve at Citi as the company continues to improve its capital position and unwinds its remaining risky assets.The company no longer is under the scrutiny of the government and is out of the media’s crosshairs. While I wouldn’t run out and buy shares tomorrow, I think that the stock is a good value play. Investors should wait for a big Dow down day and initiate a position in Citigroup.