Opinion & Analysis

Take Piti on Citi

In Investing on May 5, 2008 at 1:01 pm

I saw this editorial cartoon from FiNTAG and thought it struck a nerve. It takes aim at Citigroup’s CEO, Vikram Pandit whose hedge fund, Old Lane, was bought by Citigroup and is now poised to collapse after virtually all investors will withdraw their money. This comes just 5 months after Vikram Pandit was named CEO of Citigroup.

Some investors have also been calling for the dismantling of the financial giant; noting that its size has become a liability given its lack of organizational flexibility. Pandit has said that he plans to sell any part of Citi that doesn’t fit with Citi’s core businesses.

The Indian-born Pandit also told Financial Times last month that he expects a 20% reduction in cost that would come from a cut in headcount and improves in information systems.

“It is clearly feasible for us to take 10, 15, 20% off our cost base, especially in information technology and operations,”

Pandit told the Financial Times.  Get your resumes updates boys ‘cuz you are going to be looking.

These same investors have noted that its been a good trade for Pandit and his Old Lane coworkers but a terrible, terrible trade for Citi’s investors because he’s simply “out of his league and is just running with his contract.”