It seems that Wachovia is the latest casualty of Congressional failure on Capital Hill. Citigroup took them over for $1 a share.
But it comes at a cost: Citigroup Inc. said it will slash its quarterly dividend in half to 16 cents. It also will dilute existing shareholders by selling $10 billion in common stock to shore up its capital position.
I hope we don't see Citigroup on the "maybe list" if this thing continues for a few more weeks. They have lost $46 billion already and will take on another $42 billion in losses from Wachovia. They have $618 billion in cash and $967 billion in debt on their books. Also they were forced to cut their dividend and dilute shareholders so they couldn't use all cash for the deal.
I hope they are in the "cannot fail" category and maybe Prince Al-Walid bin Talal who I think is still a big Citigroup shareholder could give them a capital infusion if things really get too dicey.
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