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Citigroup TARP warrants heading to zero

  • A lot of people have made a lot of money buying TARP warrants issued by the large financials in conjunction with their financial crisis bailouts, but those issued by Citigroup (C +0.4%) are turning out to be poor investments at the moment.
  • The A warrants struck at $106.10 and expiring in January 2019 were  originally auctioned off by Treasury at $1.01 each in late 2011. They're now going for just $0.64 as the stock ($47.80 at last check) does little this year and the erosion of the time value picks up pace.
  • The B warrants struck at $178.50 and expiring in October 2018 are down to $0.0345 vs. their auction price of around $0.80.
Comments (5)
  • chammond63
    , contributor
    Comments (65) | Send Message
     
    I've taken a hard look at BAC, WFC, and AIG warrants in recent weeks..but I won't be looking at these anytime soon lmao
    17 Jun, 03:08 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8139) | Send Message
     
    ...and five years ago Citi was obviously going to fail.

     

    By 2019 Citigroup will be earning $14 per share.

     

    The "A" TARP warrants are a complete goldmine.
    17 Jun, 03:38 PM Reply Like
  • JeffA65
    , contributor
    Comments (11) | Send Message
     
    I didn't know warrants are publicly traded. What symbol are they and what exchange? Are there any other warrants with lower strike prices? What's so special about warrants? Couldn't you just buy a call option instead? Not sure what the difference is.
    17 Jun, 03:50 PM Reply Like
  • charliezap
    , contributor
    Comments (1166) | Send Message
     
    Warrants usually have a longer maturity than options. Warrants are issued by the company, which issues new shares upon exercise. Options are created and sold by traders.

     

    For more on differences, see:
    http://bit.ly/1nOqq3j

     

    For a chart and symbol (the Citigroup warrants are traded on the NYSE) see:
    http://on.mktw.net/1nO...
    17 Jun, 11:51 PM Reply Like
  • Rohit SSS
    , contributor
    Comments (35) | Send Message
     
    a warrants are crazy cheap and buy of lifetime, seth klarman huge holder
    22 Jun, 08:19 AM Reply Like
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