Intra-Day trade: Citi below $4

The stock just keeps falling.  It’s at $3.70 as I write this (see chart down and to the right, hit refresh if it doesn’t appear).

And the selling pressure is likely to continue.  A close friend that works in JPM’s prime brokerage unit forwarded this report from CNBC.  The selling pressure will continue…

Most institutional investors and pension funds are barred from owning stocks below $5. So if Citigroup’s stock remains below that level, it could trigger a wave of selling that would send the share price even lower.

“That’s the danger of crossing that $5 threshold,” says Owen Malcolm, senior vice president of Sanders Financial Management in Atlanta. “They’re (Citigroup) already in trouble. It could get worse.”

Money managers don’t necessarily have to sell Citi immediately. But they would have to get out before the end of the quarter if the stock doesn’t recover and may opt to do so now to mitigate potential losses.

They aren’t all forced to sell out immediately.  But this will keep up the selling pressure.

I’d love to be a fly on the wall in today’s board meeting.

Don’t look now, but the other four big banks are also cratering. JPM is down nearly $9 in the last two days, WFC is down $14 the last two weeks. Both are at risk of going below $20.

And B of A is about to cross below $10.

Posted in Wall Street, banking, credit crunch |