Yesterday, when I first saw the filing , I said

1, it's a legal formality. after the lock-up period, it's routine for such large holders to file this so-called shelf registration filing. they may not sell any at all AND when it comes to their stock holdings, I'd be shocked if they will sell any at these prices.

2, indeed, if one digs deeper and compares the latest filing with their past but also pretty recent filings, we would realize that Citadel actually bought, repeat BOUGHT shares as of the latest filing (I did have a math error in my yesterday's msg --- depending on if two of the funds listed in the document are controlled by KG, their buying was 0.5m shares or 2.9m...will update when I'm clear if Investment Partners and Investment Partners II belong to Cit or Blackrock. Nontheless, the fact is they bought.)

Today I was watching the relative performance between the stock and bonds closely. This is still tender but offers the first confirmation to my gut/guess as to their actual actions after the filing: Citadel might actually sell a bit of their bonds but use this FUD generated weakness in ETFC buying more stocks to bring their ownership closer to the 25% limit they have secured from regulators.

Why I say that?

1, Just some simple facts: ETFC the stock still at give away level, bonds however traded up from yielding in mid teen % a couple of months ago to closer to 10% just before this filing, still high but quite an upgrade by bond standard. As smart and as keep on value as KG is, he sure knows this.

2, Remember, before this filing, Cit did a separation deal in the notes put options between KG's fund Windgate and KG's controlled entity (probably worth repeating here my early observation: after the deal signed KG put bonds in his hedge fund while keeping the stocks all for his absolutely controlled entity --- a very bullish arrangement for the stock)

3, We all saw the stock intra day today, decent to say the least, but the bonds fell quite a bit more today. Not sure if it's their selling. But perhaps we can imply this bit: while more equity holders wise up to realize that KG actually bought more lately and may still buy more taking advantage of this FUD, bond holders seem to really worry about the prospect.

4, After reading the lines in the document, I noticed these two quotes, which can perhaps give us some hints:

"To our knowledge, there are currently no plans, arrangements or understandings between any selling securityholders and any underwriter, broker-dealer or agent regarding the sale of the securities. Selling securityholders may ultimately not sell all, and conceivably may not sell any, of the securities offered by them under this prospectus."

COMMENT: this para talks generally about both kinds of securities, stocks and bonds.

Then this!!

"In pursuing its economic interests, Citadel may make decisions which may be different from those you may make as a holder of the Notes. As a creditor and shareholder, Citadel could choose to pursue or support transactions that could enhance its equity investment, even though such transactions might involve risks to you as a holder of the Notes." (page 10)

Make one Hmmmmmmmmmmmmm?