Trader Talk

Waiting On The Citi

Waiting for the Citi secondary: how about a trading halt? Citi should price its secondary offering tonight, the talk remains it will likely price at least $20.5 billion (possibly more) at $3.30 to $3.35, though some think it could be as high as $3.40 (would bet against that).

Regardless of price, here's an idea being floated on trading desks: a halt in ALL trading in Citi right after the close, and a trading halt prior to the opening in all markets. That will enable Citi to open tomorrow at a SINGLE price.

Why? To avoid the debacleof Wells Fargo the other day, when bookrunner Goldman Sachs held up trading on the floor for 50 minutes before allowing it to open. In that 50 minutes, 80 million shares traded away from the NYSE, at prices ranging from $25.40 to $26.20 (secondary was $25), and traders saw their opening orders vanish.

Goldman insisted it took that long to allocate over 400 million shares, but regardless. It was embarrassing and no fault of the NYSE.

A trading halt would solve the problem.

Meanwhile, have you noticed we are at new highs in all the major indices? Say what you will, but the stock market will have had $52 billion worth of bank secondaries thrown at it in the past two weeks from B of A ($20 billion), Wells Fargo ($12 billion), and Citi (at least $20.5 billion and possibly more)--and we are sitting right near highs for the year.

That is VERY impressive action, for the middle of December, especially when many of the most active traders have moved to the sidelines.



Questions?  Comments?