Many bailed out US firms see steep stock mkt losses
New York: Billions of dollars of taxpayers' money may have bolstered Wall Street giants in fighting the financial turmoil but stocks of many such entities like Citigroup have plunged 75 percent in just one year.
According to an analysis of share prices of major American entities, who have received government funds by business magazine Fortune, have seen their stocks plummeting as much as 90 percent from August 29, 2008 to Sep 4, 2009.
Out of the 12 firms selected by the magazine, only industrial conglomerate General Electric did not receive any money from the US.
Apart from Citigroup and General Electric, others are AIG, Fannie Mae, Freddie Mac, Bank of America, CIT, American Express, Morgan Stanley, Wells Fargo, Goldman Sachs and JPMorgan Chase.
As per the report, India-origin Vikram Pandit-led Citi's shares have slumped 75 percent and the firm has received USD 45 billion worth taxpayers money.
"Citigroup has taken its share of lumps over the past year. Three government rescues, a break up of the firm's operations and even nationalisation fears took the stock below USD 1 at one point.
"But with Citi rallying this summer, some may be betting that things can only get better," the report said.
Battered insurer AIG's shares shed a staggering 90 percent and little over USD 116 billion has been pumped into the company by the US. Another major loser was financial services entity CIT whose shares nosedived 85 percent.
However, JPMorgan Chase has gained in the stock market during that period with shares shooting up nine percent.
Mortgage lenders Fannie Mae and Freddie Mac saw their stocks slide 76 percent and 59 per cent, respectively. Both companies together have been given nearly USD 100 billion in government funds.
Shares of Bank of America fell 46 percent while that of
Morgan Stanley and American Express dropped 32 percent and
18 percent, respectively.
The scrip of Wells Fargo declined 11 percent, while that
of Goldman Sachs fell just one percent.
The US is grappling with one of the worst financial
crisis in nearly 80 years and the government has come out with
unprecedented measures including massive stimulus packages to
bolster the nation's sagging economy.