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Banking industry

Citigroup's EMI Music Publishing Sale Sparks Investor Selling Pressure

Strategic Insights

— 2 min read

Citigroup's (:C) shares tumbled by over 3% to $28.41 on Monday after the company announced the sale of EMI Music Publishing to a group of investors, including Sony (:SNE), for $2.2 billion. The deal follows Citigroup's agreement to sell EMI Group's recorded music business to Universal Music Group for $1.9 billion. The early trading of U.S. stocks was marked by a decline in the broad markets, with the KBW Bank Index (:I:BKX) down 2% to 38.90. Other large U.S. banks experiencing early declines included Morgan Stanley (:MS), Goldman Sachs (:GS), Regions Financial (:RF), Bank of America (:BAC), and Bank of New York Mellon (:BK). Analyst Edward Mills of FBR expressed optimism about Bank of America's potential upside due to the Federal Housing Finance Agency's expanded mortgage refinance program.

Key Takeaways:

  • Citigroup's shares declined by over 3% to $28.41 after announcing the sale of EMI Music Publishing to a group of investors, including Sony, for $2.2 billion.
  • The deal follows Citigroup's agreement to sell EMI Group's recorded music business to Universal Music Group for $1.9 billion.
  • The KBW Bank Index (:I:BKX) was down 2% to 38.90, with all 24 index components showing early declines.
  • Large U.S. banks experiencing early declines included Morgan Stanley (:MS), Goldman Sachs (:GS), Regions Financial (:RF), Bank of America (:BAC), Bank of New York Mellon (:BK), Capital One (:COF), JPMorgan Chase (:JPM), KeyCorp (:KEY), and SunTrust (:STI).
  • The Federal Housing Finance Agency's expanded mortgage refinance program is expected to lead to an "upside surprise" for Bank of America and other large mortgage servicers, according to FBR analyst Edward Mills.
  • The program's details are set to be released on Tuesday.

Statistics:

  • Citigroup's share price: $28.41
  • KBW Bank Index (:I:BKX) decline: 2% to 38.90
  • Number of KBW Bank Index components showing declines: 24
  • Banks experiencing early declines:

+ Morgan Stanley: shares down 3% to $15.94

+ Goldman Sachs: shares down 3% to $98.83

+ Regions Financial: shares down 3% to $4.05

+ Bank of America: shares down 2% to $6.08

+ Bank of New York Mellon: shares down 2% to $21.02

+ Capital One: shares down 2% to $44.18

+ JPMorgan Chase: shares down 2% to $32.49

+ KeyCorp: shares down 2% to $7.30

+ SunTrust: shares down 2% to $19.38

  • Expected completion date of Bank of America's stake sale in China Construction Bank: November

Sources:

  • TheStreet
  • Citigroup (C)
  • Sony (SNE)
  • Blackstone Group (BX)
  • GSO Capital Partners LP
  • Universal Music Group
  • Bank of America (BAC)
  • FBR
  • Federal Housing Finance Agency (FHFA)

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