Inside Wall Street
It’s almost four years at the helm of Citigroup for Chuck Prince, and the stock is virtually unchanged. CNBC’s Charlie Gasparino joins the panel to discuss the pressure that the Street is putting on Prince and Citi.
Citigroup (C) is not a well-run company, Gasparino said. He thinks there are two ways to get the stock moving and quell investor unrest: Chuck Prince has to resign or the company needs to break itself up. Addressing the latter option, Gasparino thinks the conglomerate could potentially spin off Smith Barney as its investment bank arm – although he would hesitate to put Sallie Krawcheck, head of its Global Wealth Management division, in charge of a spun-off Smith Barney.
In order for Prince to decide it was time to go, Gasparino said, investors would have to put an extreme amount of pressure on the board. One way to do that is to get board member and influential executive Bob Rubin on the side of frustrated investors, he said.
In theory, Prince could fix the company himself. What’s keeping him from breaking it up?
Simply: he hasn’t yet, Gasparino said. Four years is a long time to wait on Wall Street. Prince’s predecessor Sandy Weil left him with a company plagued by regulatory problems and not very integrated, but investors think that mess should have been cleaned up by now, Gasparino said.
Among the speculation, Gasparino has heard that some Citi investors want John Thain, CEO of NYSE Euronext (NYX), to take over for Prince. There is nothing to say that will happen but it is a popular scenario among some on the Street, he said.
Karen Finerman said she would buy the stock if she knew Prince was going, but none of the traders, Karen included, would touch the stock as it is now.
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Trader disclosure: On Sept. 13, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Najarian is Long Build-A-Bear, is short Goldman Sachs (GS); Finerman is short Leap Wireless.