How the government botched its Citi sale
The timing and execution of the sale were all wrong.
By Jim Cramer, TheStreet
Here's a stock of a company that just reported a good quarter. It had a lot of momentum, and it was distinguishing itself as an international company with really excellent growth and a reformed management.
Any elementary trader, however, would know that until there is clarity -- no matter what kind of clarity -- in financial regulation, banks were going to be tough to buy. Too much uncertainty. So why sell now, when things are most in limbo? Strike one.
Strike two: The government knew that there was going to be a "rake Goldman Sachs (GS) over the coals" session that was meant -- as we know now -- to punish as well as elucidate. These hearings were material facts that were going to turn this red-hot group into ice. Why not wait for a few days?
Strike three: Deciding to sell 1.7 billion shares, a fraction of its total, with Morgan Stanley in a dribble-out rather than a surprise offering that could have been done in a day when strikes one and two had been digested.
Did the government have a death wish? Did it want to lose money?
There was simply no excuse for the way this was handled. None. A travesty.
So we now long holders will have to soldier through some inept selling, with confused shareholders wondering when they are going to get hit over the head next.
Just a poor job. Poor job all the way around.
Random musings: On our flagship site, Dan Freed looks at how damage from the Goldman hearings could spread to other major financials.
At the time of publication, Cramer was long Goldman Sachs.
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