If you're looking to buy the secondary, analyst Dick Bove of Rochdale thinks you're playing it all wrong.
He tells the desk, the secondary "is a terrible deal for shareholders, Vikram Pandit should have never done this thing."
Not only does Bove feel the secondary provides "no positives for shareholders" but he interprets the move to mean the interests of Citi's management team are not aligned with those of shareholders. He thinks its more about getting away from government pay restrictions than anything else.
"I put a 'sell' on this stock when I couldn't convince them not to do this deal," reveals Bove. "Three weeks ago I met with the company and talked with them about not going forward with a deal of this nature. "My view was that this was a terrible error."
"I told them wait 2 years. Let the earnings come back to the company; let the business come back - then think about getting rid of the government obligations," he says.
But they didn't. And that's turned Bove from a Citi bull into one of the most bearish analysts out there.
"The net effect is I don't want to own this stock. I don't want to own a stock in a company that's not focussed on business issues and instead focussed on financial issues. I don't want to own this stock and I would not buy it."
* And in case you're looking for a trade elsewhere in the sector, Bove adds "the two stocks really screaming to be bought are Goldman Sachs and Morgan Stanley .
In the first quarter hedge funds come back into the market and money will come into long only funds from the pension contributions and you're going to have to start trading again aggressively. In the month of January I think we see a surge in trading activity to reflect that fact that these guys have to get back into the market.
And according to Bove the two stocks mentioned above should benefit.
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