Friday, 21 November, 2008: Citigroup's Board is to meet today after its market capitalisatin fell to US$ 20.5 billion.

The plunging stock price is causing executives to consider the possibility of auctioning off parts of the conglomerate or even selling the company outright. It is believed that the discussions were preliminary and internal, and Citigroups management’s preference was to remain independent.

Citigroup’s situation became worse yesterday as its shares continued to fall despite a planned investment of $250 million by Prince Alwaleed Bin Talal, its largest individual investor. The 56.7 per cent fall in share price in one week, which closed at $3.87 in New York, prompted Citigroup's directors and senior executives to examine strategic options, including selling part or all of the company. Many US fund managers will not hold shares where the share price of a company is below US$ 5.00 and this may cause further selling.

The fall in the market capitalisation is extraordinary considering that it is now less than 20 % of the market capitalisation of HSBC Holdings, which stood at US$ 115 billion at the close today. Put in another context, the Royal Bank of Scotland could take the US$ 30 billion it is raising from the UK goverment and buy Citigroup with nearly US$ 10 billion to spare.

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