- Job Market Politics to Keep Interest Rates Low
- AIG, Symbol of Crisis, Watches Its Stock Zoom Back
- Disney Profit, Sales Top Street Forecasts; Shares Jump
- Bill Gates Praises Apple's Jobs for 'Saving the Company'
- Cities With the Most Home Price Reductions
- Cramer: The Real Reason Stocks Fell Thursday
- Is Euphoric Market Ignoring Warning Signs?
- Video Game Sales Plunge, but Have They Hit Bottom?
- Despite Rhetoric, Obama Has Few Options to Boost Jobs
- Microsoft's Bill Gates Praises Apple's Steve Jobs For 'Saving the Company'
- Gold Is a Bad Inflation Hedge—Like Oil: Stock Picker
- Intel's Andy Bryant Offers An Explanation
- US 'Actively Working' on Weaker Dollar: Fund Manager
- Options Boil on Biotech Buyout Rumors
- Warren Buffett's $100,000 Offer and $500,000 Advice for Columbia Business School Students
- Activision Blizzard's "Modern Warfare 2" Sales Break Records
- 5-Star Manager's 5 Stocks for Changing Markets
- What's The Forecast from Retailers? Proceed With Caution
MOST SHARED
- Warren Buffett and Bill Gates Share Their 'Optimism' With Eager Columbia Business Students
- Pharma & Social Media
- Cities With the Most Home Price Reductions
- Warren Buffett's $100,000 Offer and $500,000 Advice for Columbia Business School Students
- Disney Profit, Sales Top Street Forecasts; Shares Jump
- China Fourth Quarter Growth Could Hit 10%: Official
- Disney CFO and Parks Chief to Swap Roles
- Housing Recovery 'Still In Uncharted Territory': HUD Secretary
- Despite Rhetoric, Obama Has Limited Options To Boost Jobs
Text Size 
RBS Partners, an affiliate of Edward Lampert's ESL Investments, disclosed on Tuesday that it owned 15.24 million shares of Citigroup worth $782.6 million as of March 31 this year. So why is Eddie Lampert buying Citigroup and what does it mean for CEO Chuck Prince?
That's what investors, Wall Street analysts and Prince himself must be thinking right now as the news breaks that the veteran hedge fund investor has a fairly sizable stake in the massive financial-services conglomerate, whose stock price has been floundering of late.
According to a regulatory filing, Lampert has been slowly accumulating shares of Citigroup over the past year. He had around 10 million shares at the end of 2006, and by the end of March, his stake grew to 15 million shares.
A spokesman for Lampert declined to comment, but one thing is certain: Lampert is a value investor, which means he thinks that shares of Citigroup are worth more than they are currently trading.
Still several questions remain. How does Lampert think shares of Citigroup will break out of its slump? Does he think the firm's stock will outperform once the cost-cutting plan by current CEO Prince begins to take effect, or is he buying the stock to pressure current management to change course, and begin selling off some units, like its brokerage unit, as some investors have demanded to increase share price? Or is he buying stock to push for a management change at the top of Citigroup as other have suggested?
William Smith, of Smith Asset Management and a critic of Prince, believes Lampert will not be a passive investor. "This guy is in there to make money and the only way to make money is for the company to change course," Smith told CNBC.
Citigroup had no comment, but last Friday more than 70 million shares of Citigroup stock traded, sparking speculation that a major investor was dumping shares. But for every sell order, there must be someone buying, and it appears those who bought shares of Citigroup lucked out.
Citigroup closed at [C
Loading...
()
], but rose $1.06 to $53.85 in after-hours electronic trading following disclosure of the stake.
Charles Prince, Citigroup's chief executive, has faced pressure from many investors to generate faster growth and boost a stock price that has lagged many peers.
Lampert is chairman of Sears Holdings [SHLD
Loading...
()
], the parent of Sears and Kmart. Known as an active investor, Lampert orchestrated Kmart's emergence from bankruptcy in 2003.
Print
Email
- Warren Buffett and Bill Gates spoke to Columbia students, and Buffett made the students a startling offer.
- They may have wrecked their companies or saved our economy. Tell us what you think.
- Big pharma embraces social media, but how much should a tightly regulated sector say on Facebook or Twitter?
- A European dating site finds lovelorn singles from one country to be consistently uglier. Which is it?
- Contributor David Pogue looks at two of the latest efforts to perfect the digital pocket camera.
- PepsiCo is ramping up its onsite health facilities for workers.
Data is a real-time snapshot *Data is delayed at least 15 minutes