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Thursday Dec 14, 2006
The CFO Remains the Same
By Ian L. CooperThe sheep were lead to the slaughterhouse on Monday. Hopes were running high that the Citigroup split-up rumors were true. There was even hope that there’d be a management shakeup. The latter they got; just not what they had hoped for. Sad but true, the CFO and CEO would remain the same. It was a new COO that was filling in an empty slot.
The stock may have run up hard and fast on anticipation, but it’s likely to come down just as fast on the reality of it all. There will be no splitting of the company (the CEO quickly dismissed it on Monday as “groundless,” according to Reuters) and the CFO will remain. So, it wasn’t a shock to see the Street give the news several middle fingers and a “thumbs down.”
The shuffle, according to The New York Times, “also indicates that despite recent speculation, Mr. Prince (Citigroup CEO) is sticking with his plans: more cross-selling at home, more expansion and investment abroad, and, with newly added emphasis, improved efficiency.” But it’ll take more than that to convince the Street that things are turning around for the troubled company.
Heck, today, the CEO will even try to persuade investors that his strategy really is working and that the company can really close that growth gap with its competition, which is not an easy task considering that the “gap between Citigroup’s stock and an index of like companies has never been wide since the banking giant was created eight years ago…” according to analysis reported by The New York Times.
We hope Citigroup can convince the Street that it can turn things around. But it’ll take a lot of hard work and real numbers to do that. For now, we remain bearish on Citigroup shares near-term.
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