Citi on the brink

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This time last year, Citigroup Inc. was valued at about $180 billion. As of Friday morning, its market capitalization stood at $20 billion -- and its once-proud share price had shriveled to $3.75, a 16-year low.

Citigroup's share price has dropped more than 60% this week, and analysts are starting to wonder just what the future holds for the financial-services company a Dow Jones Industrial Average component.

There are several options facing Citigroup as it tries to stem the decline.
It could sell some of its business units or even sell itself whole -- both are under consideration, according a Wall Street Journal report -- or it could try to buy itself time and gain market confidence by firing Vikram Pandit as chief executive.

In a call with senior managers on Friday morning, Pandit reportedly said he intends to keep the bank whole and independent. But events appear quickly to be overtaking Pandit, the former Morgan Stanley executive and hedge-fund manager who took over as CEO last year.
Citigroup's board was meeting Friday to discuss its options, according to a report by Bloomberg. The board may decide to overrule Pandit and sanction sell-offs.

An analyst note Friday from Deutsche Bank illustrated the extent to which the Citigroup's plunging stock price could reduce the bank's value.
"The issue with Citi is the degree to which the downtrend in its stock price affects fundamental factors, as seen with other financial firms over the past few months," said the research brief. "For this reason, we noted in our report that Citi's stock could decline to about half of tangible book value (our $9 price target is set at a 0.9x estimated 3Q08-end tangible book value).

Sourch: MarketWatch