A Look At Citigroup's Stock Price Under Vikram Pandit

Bank of America's (NYSE: BAC) CEO Brian Moynihan has been catching a lot of heat recently, and rightly so, given the bank's plunging stock price under his tenure. He is also making a name for himself due to his delusionally upbeat forecasts for his company that in no way conform to reality. The negative attention that Bank of America and its CEO is garnering has shifted the spotlight from another sprawling, inept outfit with a bungling CEO that is also noteworthy for its ability to destroy shareholder value. That of course would be Citigroup (NYSE: C), which is only in existence today because of extraordinary government (taxpayer) largesse.

Citi's CEO, Vikram Pandit, unlike Moynihan, has presided over the entire mess. Moynihan took the reins at BAC in January of 2010. Pandit, on the other hand, has been the CEO of Citigroup since December 2007. On the day that Pandit took over the top spot, Citigroup shares opened trading at around $348 (split-adjusted). Today, the shares are trading at a laughable $28.95, down another 3.50%. Now that is what you call value destruction! This is what Mr. Pandit has brought to the table. How is that not utter failure? It is inconceivable that he is still running Citigroup.

Even if we give him the benefit of the doubt (which he doesn't deserve), and say that 95% of the bank's problems are in no way his fault, shouldn't someone be held accountable? Shouldn't accountability flow to the top of the organization? Now, the reality is, that Pandit is very much responsible for the bank's terrible performance, but even if he wasn't, he should still lose his job. What does it take to lose your job as the head of a major bank these days? I mean CNBC ranked Pandit as the 20th worse CEO of all time for goodness sakes!

If you are an investor, do you look at Citigroup stock and say to yourself, "you know, this is a terrific bargain, I know that Vikram Pandit is the guy to turn this bank around." That is ridiculous. That ship sailed years ago. No one wants to touch this stock, because Citi is a laughingstock. It burns everyone! Two of the most successful hedge fund managers in the world, David Tepper and John Paulson, learned this the hard way in 2011.

Think of all the great companies with tremendous management teams and track records of creating shareholder value that trade on American exchanges. Yet, investors continue to try to catch a bottom in perpetually awful stocks such as BAC and C. Why? Getting wiped out trying to catch falling knives is as old as speculation itself. You can probably save yourself a good deal of psychological and financial capital by staying away from Bank of America and Citigroup and their bungling CEOs.