Saturday, May 10, 2008

Citi or Citigroup is restructuring

I'm not quite sure what is going on with Citi, but I think everything that is happening in that company is coming from several factors. For one, the mortgage mess dropped Citi's stocks from $40-something to $20-something a share. This forced Citi to cut its dividends. Because of the mistake that Citi invested into bad debts (over $40 billion of it), former CEO Charles Prince resigned. The new CEO has no clear vision or he is being really quite about what he has plans for the company. And now, Citi is now doing one big restructuring plan that is worth $400 billion. Despite all this, Citi is still worth over $2 trillion.

About a month ago, Citi sold Citistreet to ING for $900 million. Citistreet is a company that does benefit plans for businesses (both big and small). I see that as good news for it will create large opportunities for Citistreet to grow its organization. Will this affect Primerica? I don't believe so since Primerica still has marketing agreements with Citistreet to offer business retirement plans.

Citi also plans to sell some other companies including Primerica. I believe Primerica is planning to buy itself from Citi. I don't have all the details yet but when it does happen, great things are going to happen to Primerica. For one, Primerica can start selling their company stocks once again. They use to sell their stocks long ago and the value of the stocks doubled every year during the 1990s. Then the company got bought out by Citigroup. Second, Primerica can focus on its own goals. Third, it will create huge opportunity for Primerica to expand its market. Forth, no more oversight of Citigroup looking over Primerica's shoulders and no more sharing of profits with Citigroup too.

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