Chapter 5.2.2. Share Price
Exhibit 2 illustrates how Citigroup’s share prices evolved during the last two decades:
Exhibit 2. Citigroup share price
Throughout the first decade between 1986 and 1995, there was relatively small growth (depicted by the long yellow arrow), which could be explained by Travelers’s struggle to shape the company. The share price boosted as more acquisitions happened after 1992 and then between 1995 and 1998 (the first green arrow). There was a big drop in the share price around the merger between Citibank and Travelers (the steep down red arrow), but the merger itself was only a little to blame. The dip was more caused by the economic environment and could be observed for all major competitors (see also Exhibit 3). Throughout 1999 and 2002, the share price busted as the company started to impress the shareholders with high earnings (the second green arrow). The economic environment can again explain a dip in 2002 (depicted by the second red arrow).
On average, Citigroup’s share price has bitten those of its closest competitors by the factor of three if we look it from the various time points as shown in Exhibit 3 and Exhibit 4 (Deutsche Bank was left out in this analysis due to variation in the Euro/Dollar currency exchange rate):
Exhibit 3. Citigroup share price vs major competitors (1986/1/1 = 100%)
Though, between 1996 and 2000 Citigroup outperformed it rivals by 300%, there was little growth in the whole industry in the last six years as the share prices remained constant.
Exhibit 4. Citigroup share price vs major competitors (1996/1/1 = 100%)
