Monday, January 24, 2011

Treasury to Sell Citigroup Warrants

The Treasury today announced that it has commenced a secondary public offering of 255,033,142 warrants to purchase the common stock of Citigroup Inc. known as the “A Warrants” and secondary public offering of 210,084,034 warrants to purchase the common stock through “B Warrants”.

Deutsche Bank Securities, in its capacity as auction agent, will auction the warrants on Tuesday January 25, after which they will trade in the open market. During the auction period, potential bidders for the A Warrants will be able to place bids at any price (in increments of $0.01) at or above the minimum bid price of $0.60 per warrant, and potential bidders for the B Warrants will be able to place bids at any price (in increments of $0.01) at or above the minimum bid price of $0.15 per warrant.

The Treasury received the warrants as part of its TARP bailout. No doubt Geithner will be out in a day or so with a press release proclaiming more "profit for the taxpayers". Personally, I'm still looking for the line on my 1040 where I reduce my income taxes by this "profit".

2 comments:

  1. Typo in the title: 'warramts' for 'warrants'.

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  2. Wow, these warrants are really really out of the money. Class A is 10.61. Class B is 17.85. Is there enough growth potential in C to justify buying any part of that? As for the profits, I think that we paid for the "profits" with extreme potential risk for inflation. Without so much monetization of debt by the fed, these profits wouldn't be possible.

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