UPDATE: See Jim Cramer's response below
Though we think the following clip from CNBC's Jim Cramer speaks for itself, here's some explanation.
On Monday, Cramer went on a breathless -- and rather unbelievable -- rant about the merits of buying Citigroup's stock. (Yes, he was referring to everyone's favorite bailed-out, quasi-zombie financial firm.) His logic: Citigroup's stock was priced so low that it could sit in your portfolio for years, it has a great reputation abroad and was much less exposed to the mortgage market than, say, Wells Fargo.
Here's Cramer: "We're looking for doorbusters and you're getting a doorbuster! You're getting a discount and getting it big time and getting a huge piece of marked-down Citigroup merchandise."
So, what's happened since Monday?
Citigroup recently announced that it planned to repay the government's $20.5 billion in bailout funds by issuing stock in a secondary offering. At the same time, the government announced that it would sell off its stake in the bank.
But, last night, news surfaced that Citigroup's stock offering was going so incredibly poorly that the government, fearing it would take a loss, decided to delay its plans to sell its stake in the bank.
Jim Cramer's advice, however, was to "buy, buy, buy" Citigroup.
From the below video, it seems unclear whether or not Cramer is recommending the stock's secondary offering price ($3.15) or just telling viewers to go out out and buy the stock. Here's the accompanying piece from CNBC.com:
The share price is just $3.70, a near lottery-ticket price with somewhat similar potential. While the dollar amount doesn't matter, Cramer does bless this as a single-digit speculation play, the kind that investors seem to love so much.
"You have to take advantage of the discount, even if you don't like the company!" Cramer said on air.
How's that investment doing so far? Citi's stock stood at $3.20 early Thursday night -- just about a 14 percent loss in three days if you had bought Citi shares outside of the secondary offering price, as Zero Hedge pointed out.
Maybe Cramer's pick just needs some time to even out -- or maybe it will fare just as poorly as his housing bottom call from last spring.
(UPDATE: Jim Cramer wrote in and said that he intended his recommendation to only apply to Citigroup's secondary stock offering price, which was $3.15. CNBC.com's accompanying piece, however, and many of Cramer's other comments in the video suggest that Citi's main stock price of $3.70 was still quite low.
- Cramer says Citigroup's stock price will triple in the next few years.
- Cramer's fourth reason to buy the stock is that it was already at trading at low price -- before the secondary offering, in other words.
- At one point in the video, Cramer argues against buying the stock at any other price than at the secondary offering price, but then spends the next several minutes arguing why the stock is generally undervalued.)