Citigroup 4th Qtr 2008 Highlights

4th quarter 2008 results are in for Citigroup and they don't look very good at all. Citigroup announced $8.3 billion in losses on revenues of $21.2 billion, this the 5th consecutive quarter of losses. Earnings per share were -$1.72.

More importantly though, the company announced that they are going to split into two entities - Citi Holdings and Citicorp.

Citigroup Highlights

• Revenues of $21.2 billion
• $7.3 billion in write down and losses
• -$2.5 billion in Securities and Banking private equity and equity investments
• -$5.3 billion in derivative positions
• Net revenues fell 13% yoy; 66% sequentially
• Net loss $8.3 billion
• EPS -$1.72/share
• Assets reduced from $2.4 trillion to $1.9 trillion
• Number of employees reduced from 375,000 to 323,000
• Plans to reduce head count to 300,000 in near term
• Credit card loss rates have surpassed historic highs
• Agree to share losses with US Government $306 billion in securities, loans backed by residential and commercial real estate
• Subprime exposure reduced from $19.6 billion to $14.1 billion

Restructuring Citigroup

1. Citi Holdings

   consumer mortgages, credit cards, brokerage asset management, private label

2. Citicorp

   global bank for businesses and consumers

Estimate 80% of profits driven by Citicorp division.

Stock Price

Citgroup (NYSE: C) is trading $3.50 as of close Friday. Bargain? The stock is trading well below it's $14.69 book value and is just hovering above its 52 week low at $3.05. Looking at the chart, my eyes say that it grinds lower under $2.

Citigroup has a huge 5.5 billion share float and lately has been trading about 400 million shares a day. At that rate its taking 12 days of accumulation to work with. I would wait for a few float turnovers before even attempting to get long in a position. Volatility is too high here as well with 10-15% daily swings - nothing you want to build a position with.

About Kerry Kobashi

Kerry is the founder of KerryOnWorld. He lives in Silicon Valley and has worked as an engineer and project manager. He owns Kobashi Computing a consulting company.