Bill Smith Skewers Pandit – Still Likes Citigroup (C)

Bill Smith of Smith Asset Management, skewered Vikram Pandit, the CEO of Citigroup (NYSE: C) on Pimm Fox’s Taking Stock, radio show last Friday. Hell hath no greater fury than a shareholder burned. Smith is a long term holder of Citi’s stock, which he accumulated from the Traveler’s merger. The origin of Smith’s wrath is that he recommended that Citi sell some of its assets when the stock was 40, and Pandit took over. Now that the stock is 4, Citi is doing just that, at fire sale prices.

Smith’s observations about Pandit:

“He said they had enough capital they didn’t.”

“He loved the supermarket model when he took over and the stock was 40.”

“He said he wouldn’t cut the dividend they did.”

“He said he wouldn’t sell Smith Barney, 40 days later they did.”

“He paid back TARP just because the other firms did, which wildly diluted the current shareholders.”

“He let Wells Fargo takeover Wachovia when it would have been a good deposit base for Citi.”

“McKinsey did a study for Citi’s board when Pandit tookover that said break it up. The stock was at $40.”

Like a burned but obsessed lover, Smith is still positive on the stock. He thinks the most optimistic scenario is 2x book value, which would bring the stock to $8, in the next few years.