Citi shares jump as Berkshire adds $3 billion stake -Breaking
(Reuters) – Citigroup After a $3 billion investment by Warren Buffett’s Berkshire Hathaway, Inc’s premarket trades saw its shares rise nearly 5%. This boost in confidence for the Wall Street banker’s stock helped Inc to gain traction.
Berkshire bought Citigroup’s shares for almost $3 billion during the March 31 quarter. It did so after a dip in U.S. banking stocks involving fears about slowing growth and a 5% share pullback.
Citi has undergone a restructuring led by Jane Fraser, Chief Executive Officer. This is in response to its poor financial performance. After receiving orders from U.S. banks regulators, the bank is working to improve its compliance and risk management systems.
The shares of the bank have plunged by 38% in the last 12 months. This is the worst performance among Wall Street banks. Berkshire, which is Bank of America Corp (NYSE): has fallen 18% over last year.
Berkshire has also exited its investment of 33 years in Wells Fargo (NYSE:) & Co and deployed its cash to build stakes in Ally Financial (NYSE:) Inc, chemicals and specialty materials company Celanese (NYSE) Corp. and McKesson Corp. (NYSE) among other things, boosting their shares.
Warren Buffett is an advocate of investing in value stocks, which are assets that have a lower intrinsic value than their actual value.
This story is rewritten to fix a typo in paragraph 1.