By Jay Heflin - 03/29/10 12:53 PM EDT
Market conditions will determine the speed and proceeds of the sell-off.
The sale of the shares could be a tricky business. Treasury holds so much Citigroup stock that a massive sale would likely drive the stock's price down, leaving the Treasury and the taxpayers with less money.
The stock was worth roughly $1 when Treasury bought it a
year ago. The stock closed at $4.31 on Friday, meaning the Department
and taxpayers would have garnered a tidy 400-plus percent gain if all
shares were sold that day.
"Treasury intends to sell its Citigroup common shares into the market through various means in an orderly and measured fashion," the Department stated in its release announcing the sale. "Treasury intends to initiate its disposition of the common shares pursuant to a pre-arranged written trading plan. The manner, amount and timing of the sales under the plan is dependent upon a number of factors."
Morgan Stanley will be Treasury's capital market adviser in connection with its Citigroup position.
Treasury received the shares in exchange for bailing out Citigroup. The sale of the stock would allow Citigroup to sever just about all ties from the $700 billion Troubled Assets Relief Program.