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Reporter
For everyone who thinks the government is wasting money helping banks out, UBS pointed out this morning that the recent conversion of Citigroup's [C
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] preferred shares into common has netted the Treasury a $10 billion (unrealized) profit.
Treasury converted $25 billion of their $52 billion in preferreds at $3.25, and with the closing yesterday at $4.48 the stock has appreciated over 40 percent.
Each penny increase in the stock price produces a $76 million unrealized gain.
Will the Treasury take profits? UBS [UBS
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] says, "As we understand it, the Treasury isn't restricted as to when it can sell its common stake, & while it may be a bit early and we think the sale of their common stake isn't imminent (though it would be nice to make a big profit while saving the system & getting out), we also don't think of them as a long-term holder."
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- Stocks Lurking Near New Highs Again
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- This Week's Biggest Story: The Dollar
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