Tuesday, November 18, 2008
(Cont'd from above)...

Jim (cont'd):   

Just like Cramer-fave, President Nixon, we don't have Jerry Yang to kick around anymore...

We've got an empty slot on the Wall of Shame...

I've got just the guy to take his place... just the guy... Yeah, someone who is every bit as underperforming and value-destroying... well, let's cut to the chase...

Yes...

Citigroup (C)'s Vikram Pandit!...

Like fellow diplomat, the late John Lennon, all I've been saying is give Vikram Pandit a chance...

He officially took over from Chuck "the clown" Prince - a former Wall of Shamer himself - on December 11th of last year... Chuck Prince had done so much damage to Citigroup, that I didn't want to blame Pandit for Prince's mistakes... But it's been 11 months now, and all Vikram Pandit has shown us he has done is show us that he is indeed the true successor to Chuck Prince in all the worst ways...

Oh, and like Prince, believe me, this guy's no pauper...

Citigroup was a $33.23 stock when Pandit took charge. It's now at $8.36. It touched below $8 at one point today. It's down 74.8% since Pandit became CEO. He's been a totally complacent chief, lacking any sense of urgency.

Pandit did only one equity offering, at about $25 a share, even though we preached endlessly that he should do another... especially when the FCC came in with the short selling ban, and gave Citigroup, the stock, a fabulous lift, and the perfect chance to raise money... Nope. Didn't do it.

Let's just admit it. Pandit is totally in over his head...

He tells everyone that Citigroup is well capitalized when, according to the Wall Street Journal, it's still highly leveraged, and investors remain worried about capital.

Now, Citigroup is a single-digit stock... in spite of the fact that it got a very favorable $25 billion investment from the Treasury Department... I find that unbelievable... Pandit has spilled non-stop red ink...

I've been trying to get my mind around it... and give you an example of what it might be... and I hit it... I hit it... This is a guy that's presided over four straight quarters of enormous losses, and tens of billions of dollars of writedowns... A $9.83 billion loss - or $1.99 per share in the last quarter of 2007/1st quarter of 2008 - Pandit's first full quarter on the job at Citigroup, $5.1 billion - or $1.02 a share... more than $14 billion of writedowns of mostly toxic mortgages... The second quarter of the year, Pandit, a $2.5 billion loss - or a $0.54 share... Another $7.5 billion in writedowns, courtesy of Citigroup's exposure to subprime... etc...

Does he think, perhaps, that losses are good things?

I think Pandit needs to come in and break up Citigroup. That's what I was hoping. It's got a huge asset base. But he has proven that either breaking up is too hard to do, or he just isn't doing it. Either way, the assets are not being monetized.

Under Pandit, Citigroup has made endless announcements of layoffs... most recently, on Monday... 53,000 workers. But you have to read today's article in The Wall Street Journal... "Job losses won't cut it for CitiGroup"... to get a sense that we still haven't seen the benefits of any of the myriad firings and restructurings.

And even when the FDIC came in and threw Citigroup a juicy bone, with a sweetheart Wachovia deal, Pandit still couldn't pull it off... He was outbid by WFC, without federal help. This could have been a great opportunity for Citigroup, and it had Sheila Bair, the head of the FDIC, on its side. But Pandit just couldn't get the job done.

Under Pandit, Citigroup has had to brutally slash its dividend twice... First, a 41% cut on January 16th, that lowered the dividend from 54 cents, to 32 cents. Then, on September 29th, Citigroup cut its dividend in half to 16 cents a share... Wonderful. Exactly what investors wanted to see...

With a track record like this, can someone please call (me) and tell me why Vikram Pandit shouldn't be on the Wall of Shame?... I mean, really...

I would like to invite Pandit, or the CFO, or anyone for that matter from this institution to come on my show, and tell me why Pandit is the right man for the job... I am open-minded on this, because banking has become a disastrous business... but someone's got to answer for the decline here. And that someone is Pandit. The buck always stops with the CEO.

Here's the bottom line...

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The Bottom Line!:     Funny... C under Vikram Pandit, looks a lot like Citigroup under Chuck Prince, and that's why Pandit is the latest member of the Mad Money Wall of Shame. Let's hope he pulls a Jerry Yang, and quits, causing Citigroup's stock to rally substantially.

[verbatim recap]

Read Jim's next Segment here