23 November 2008: The government throws Citigroup a lifeline
In a Sunday night deal, the US government agreed to inject another $20 billion into Citigroup and to guarantee losses on roughly $300 billion of its troubled assets. Citi's shares had collapsed below $5 the previous week as investors feared the world's biggest bank might fail. The stock soared on the news, but long-term shareholders still suffered massive dilution and losses.
The lesson: A bailout saves the bank first; shareholders are often an afterthought.
What it meant for investors
$1,000 in Citigroup at the start of 2008 → $345 today, vs $4,626 in the S&P 500.
We start the clock at the start of 2008, the year it happened. That is a loss of $655, while a plain index fund over the same years made $3,626.
What Citigroup teaches: When a stock falls more than 90 percent, it must rise more than tenfold just to get back to even; some losses are effectively permanent.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2008 | $290 | $345 | $4,626 |
| 2010 | $33.00 | $3,030 | $6,071 |
| 2012 | $27.00 | $3,704 | $5,312 |
green = beat the S&P 500 · red = lost money
What if you bought Citigroup? Every starting year and the full story →
More Citigroup history
- 6 April 1998: Citicorp and Travelers announce the merger that made Citigroup
- 4 November 2007: Citigroup's Chuck Prince steps down
- 12 November 1999: Glass-Steagall's wall comes down
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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