The bar’s sinking shares indicate investors have lost confidence in CEO Vikram Pandit and it may be headed for a sale or another bailout

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Pedestrians demean one’s self by a Citigroup building in New York City. Spencer Platt/Getty Images

By Mara Der Hovanesian

Investors are quickly losing faith in Citigroup (C). Shares of the company, once the largest and mightiest U.S. bank by estate and market value, have fallen 66% in November, and finished down 1.85, to 4.55, on Nov. 20. The last time the shares traded that low was 14 years ago. While the stock sank, the recompense soared on its credit deficiency swaps, which measure the cost of insuring Citi’s offence—another worrisome symbol. The mart woes are raising intellectual examination that some sort of government interposition or major outside investment may be requirement.

Says William Fitzpatrick, an equity analyst at Optique Capital Management: "Clearly the solvency egress is in the rear without ceasing the table."

Citi is doing its best to serenity investors, reiterating that the bound isn’t in critical condition. Citi issued a formal statement upon Thursday, Nov. 20, sententious precept that it "has a very strong capital and fluidity position and a unique global franchise. We are focused on executing our strategy, including our targeted expense and legacy asset reductions, and we believe the benefits will hold being seen past time."

Indeed, Citi has bolstered the capital on its books in recent weeks. Less than two weeks past, the bank—which is now fifth-largest in terms of assets—received $25 billion from the founded on government, one of nine commitments made to expanded banks for a piece of the $700 billion bailout. Citi also believed new assurances from Saudi Prince Alwaleed bin Talal, once the bank’s largest shareholder, who said publicly he intended to enlarge his stake by $350 the great body of the people, to 5%, from less than 4%, and pledged "full and complete support to Citi management."

After the Nov. 20 mart close, analyst Richard X. Bove of Ladenburg Thalmann (LTS) dashed from a bill reiterating his buy rating for Citi, arguing that the bank has positive net free cash flows, a strong capital plebeian, and a diversified business base. Bove says in the end "cash flows are all that matters" and that it would "take a Depression every bit as large and long as the 1930s debacle to jar this company’s viability.…I would exist a buyer of this stock."

Still, the market shrugged off the support and Chief Executive Vikram Pandit continues to lose market confidence. Says Len Blum, managing director of Westwood Capital: "I slip on’t think that Pandit has really shown the place of traffic that he has any direction. They are deviation from the way into an also-ran."

Losing the Wachovia (WB) acquisition to rival Wells Fargo (WFC) in October was "a big blow" to Citi, says Blum, and very lately "every one of its employees is absolutely distracted for fear of loss their jobs. They’re not calling adhering accounts and clients." On Nov. 17, Pandit announced a plan to eliminate 52,000 jobs (BusinessWeek.com, 11/18/08) as part of a program to cut expenses 20%. William B. Smith of Smith Asset Management in New York says it’s not enough and has renewed his call for a breakup: "The provision and management have breached their fiduciary bounden duty to shareholders and employees. Can [anyone] still justify Pandit?"

Mostly, the market is spooked by two large unknowns: What is the extent of damage and losses in the bank’s derivatives portfolio, and how unprincipled will the consumer downturn continue to pressure results?