Citigroup (NYSE:C) Shares Continue to Rise

It’s fund watching the Citigroup (NYSE:C) shares rise, as it reminds you of people making huge investments based on nothing but the herd mentality, as Citigroup has nothing happening to it that justifies the stock being bid up like it is, but I know those moving in and out of the market are loving it.

Since the close at the end of last week at $3.50, Citigroup shares have rising as high as $4.07 a share, and may even rise more. Shares exchanging hands has been high as well, with close to 200 million in volume being registered early today.

What is all this about? Part of it was the comments made recently by a hedge fund manager and debt research company. CreditSights and hedge fund manager Bruce Berkowitz made positive comments about Citigroup and the stock started running since then.

The strong response to the $2 billion in trust-perferred securities could have had an ancillary effect as well. That’s understandable with the 8.875 percent interest being offered, although that was lowered for some to 8.50 percent.

Possibly the biggest influence on the stock share run-up was the news reports that the government may be finally ready to abandon the 25 percent stake it holds in Citigroup, and could offload their shares over the next three months. That, probably more than anything, is what has driven the stock price up.

The combination of factors has helped Citigroup get a nice short-term bump in price and distract investors and the public from the negative side of the fundamentals of the company, which are a long way from changing.

Even as I write Vikram Pandit is about to lay out in detail his strategy for Citigroup, with the idea most think to take the focus off the negative fundamentals of the company and transfer attention to where he wants to take the financial institution.

Pandit is expected to lay out growth projections for Citigroup today, and that could seal his fate one way or the other as to his keeping his job. As the numbers he throws out will be watched carefully, and if he’s overly optimistic he’ll be putting himself in a corner which he won’t be able to escape out of.

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