The Treasury Department said it will sell 1.5 billion shares of Citigroup stock over the next two months, the latest effort to recoup money from the government's $700 billion financial bailout.
The third phase of Citigroup (C) stock sales will begin immediately and end by Sept. 30, Treasury said Friday. The government has already sold 2.6 billion shares for $10.5 billion.
Citigroup received $45 billion in taxpayer support in one of the largest bank rescues by the government. Of the $45 billion, $25 billion was converted to a government-ownership stake. The government is now selling that off. The bank repaid the other $20 billion last December.
Citigroup stock closed at $4.09 in trading on Thursday and over the past 52 weeks has ranged in price from $2.56 to $5.43.
Treasury converted $25 billion of its investment in Citigroup into common stock in the summer of 2009, receiving 7.7 billion shares at a share price of $3.25. At the time, Treasury's stake amounted to 27% of the company.
Treasury has said it plans to sell its entire stake in Citigroup by the end of the year. The first segment of sales, covering 1.5 billion shares, concluded in May. The second, covering another 1.1 billion shares, took place in June.
The government bailouts of banks, auto companies and insurance giant American International Group Inc. have drawn heavy criticism. Many charge that the Wall Street firms that helped lead the country into recession are now reaping profits while ordinary Americans continue to struggle with 9.5% unemployment and soaring home foreclosures.
The administration said its actions were necessary to stabilize the economy and prevent a deep recession from getting worse.
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