Citigroup’s Chuck Prince Won’t Take a Hint

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Citigroup (C-NYSE) needs to make it 15,001.  Chuck Prince told Reuters that he wouldn’t comment on the reports of layoffs.  What is ironic here is that Citigroup is down today.  Sure you can blame a drop of 80 points on the DJIA since it had opened up this morning.  But the early gains were so small that Wall Street is sending the message that the company just doesn’t get it.  Companies often leak information out to the press or to analysts to test the waters to see how the stock reacts, and Chuck Prince needs to see the stock and realize that he should be the 15,000 + HIM.

The sad thing is that job cuts are coming at Citigroup regardless of Chuck Prince, but he can be known for the job cuts or he can be known for doing the right thing.  The company needs some serious system upgrades and integrations, needs some consolidations, and needs some streamlining.  Its expenses are considered too high, and I have yet to find anyone who think that Chuck Prince AND Robert Rubin deserved their major payouts.

Prince Alwaleed bin Talal needs to make more of a difference here.  There is so much more that can be done inside the company.  He needs to issue a statement that if Chuck Prince doesn’t leave that he may reconsider his investment.  Yes that is too harsh, because the Prince can’t replace his investment now in another global financial company.  But that would sure get investors’ attention across the board. 

Back in February we gave a scenario where Chuck Prince could save the company and he could save some face as well.  I will be the first to admit that it barely scratched the surface of what needs to be done, mostly because it could be a 100,000 word case study.  He really needs to take heed.  He is in a conundrum as well over the ABN AMRO (ABN) availability for a deal: How can a guy like Chuck Prince go buy the company and successfully sell Wall Street that two stock financials can merge and be better as one?

How many times can a call for Chuck Prince be made to leave?  The company has earnings and its shareholder day coming up, and this would be as good of a time as any.  There is still a question as to WHO IT WOULD BE that would lead the company, but right now Wall Street is telling the company that they would rather have the position vacant than have Chuck Prince in it.

Jon C. Ogg
March 26, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.