|March 10, 2009|
|Citi CEO Urges Word-of-Mouth PR to Pitch Line that Bank has a Future|
|By Kevin McCauley|
|All it took was a memo from Citigroup CEO Vikram Pandit to send shares of the beleaguered bank soaring more than 35 percent today to $1.41. Talk about the power of PR. |
Okay, Citi shares are trading far below the 52-week high of $27, and forget about the $70-a-share price enjoyed by stockholders in '07. At least for today, Citi’s remaining stoic stockholders own shares that are going in the right direction.
Pandit’s “Dear Citi Colleagues” memo, which has been filed as an 8-K Report with the Securities and Exchange Commission, says Citi was profitable during the first two months of the year and is enjoying the best quarter-to-date performance since the third quarter of 2007.
A question for Pandit: What took you so long to go public?
Citi has been battered to bits for months with talk of nationalization, and suggestions from geniuses like Alabama Senator Richard Shelby that it wouldn’t be too terrible if a couple of big banks failed. Hint, hint, especially that big bad financial monster in New York City.
This writer doesn’t expect Pandit to be shilling Citi shares or leading an executive chorus in singing "Happy Days Are Here Again." Pandit is expected be front and center in assuring the country that Citi has a pulse and future. That's what leaders do.
Pandit, an obvious devotee of word-of-mouth PR, urges staffers to talk up the bank. “I would encourage each of you to continually engage with your colleagues and clients to ensure open lines of communication,” he wrote.
The CEO helpfully attached some “important information points as an aid in your discussions.” For example, “Our stock price is not an indication of our financial strength,” and "We believe our credit spreads are disconnected from our conditions and are inconsistent with the government's announcements regarding support for the financial system."
Granted Pandit needs a little help in the talking points department.
Pandit’s outreach contrasts sharply with the sleazy ways of Bank of America CEO Ken Lewis, whom the Wall Street Journal reports is telling everyone that his bank isn’t in the same financial ditch as Citi. It's similar to Bulgaria Tourism pitching travelers with the line, "We are not Romania."
BofA spokesperson Robert Stickler told the WSJ that it is unfair to “carelessly” dump the two banks into the same basket. He said Lewis is “working very hard to help people understand the difference” between the two banks.
There is a giant factor that joins Citi and BA at the hip. Each took $45B in federal bailout money. That sure makes it hard for taxpayers to distinguish between the duo.
BA shares rose with Citi today, up 25 percent today to $4.71. Lewis can thank Pandit for that good news.
Tomorrow is another trading day for the troubled twins.
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