Citi shares climb as Berkshire reveals new $3 BLN stake

Date:

Citigroup Inc’s shares rose nearly 8% after a new $3 billion bet by billionaire investor Warren Buffett’s Berkshire Hathaway Inc boosted confidence in the battered Wall Street lender’s stock. Berkshire built its stake in Citigroup in the quarter ended March 31, taking advantage of a 5% pullback in shares.

The shares have slumped 38% over the past 12 months. Thomas Hayes, chairman at Great Hill Capital in New York said that Citi is one of the cheapest stocks in the market. With Buffett ‘blessing’ it, it should finally get the interest it deserves and attract some buying interest in coming weeks and months. A view of the exterior of the Citibank corporate headquarters in New York, New York, U.S. May 20, 2015.

Citi, which lags the financial performance of its peers, is undergoing an overhaul led by Chief Executive Officer Jane Fraser. It is also working to fix its risk and compliance systems after regulatory orders. Wells Fargo analyst Mike Mayo said that the Berkshire investment seems like it gives validation to CEO Jane Fraser as an effective financial architect. However, it has no bearing on what’s needed most, and that is the building out and completion of the transformation plan. The latest investment takes Berkshire’s interest in Citi to 2.8%, making it the fourth largest shareholder. Investing in so-called value stocks assets trading below their intrinsic value has a broad following and Warren Buffett is a prominent proponent of this investment style. Berkshire also exited its 33-year-old investment in Wells Fargo & Co.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Subscribe

spot_imgspot_img

Popular

More like this
Related

Dollar Weakens as Fed Signals Potential Policy Shift: Currency Market Analysis

Amidst Federal Reserve Chair Jerome Powell's hints at a...

Navigating National Security: The U.S. Senate’s Biotech Bill

The U.S. Senate's homeland security committee recently took a...

Citigroup’s Strategic Reinforcement: Don Plaus Appointed Head of Private Bank in North America

Citigroup (C.N) made headlines with its recent appointment of...

Nel Contemplates Spin-Off: Navigating Challenges in the Hydrogen Sector

Nel, a Norwegian company specializing in hydrogen technology, has...