NEW YORK (CNNMoney.com) -- Citigroup's largest individual shareholder, Saudi Prince Alwaleed Bin Talal, said Thursday he planned to increase his stake in Citigroup back to 5%. But the stock continued its painful slide despite this news.
Shares of Citigroup (C, Fortune 500) cratered 25% Thursday, extending the brutal losses from Wednesday, when the stock plunged 23%.The stock down 83% so far this year.
The move by Alwaleed, a long-time investor in the bank, follows the U.S. government's decision to inject some $25 billion into the New York City-based bank. That left Alwaleed with about a 4% stake in Citigroup.
In a press release from his holding company, Alwaleed expressed his faith in Citigroup management, including CEO Vikram Pandit, and added that he believed the company was doing what is necessary to weather the current economic crisis.
Alwaleed's firm did not provide terms of the purchase including how many shares he would purchase or at what price.
Based on the most recent securities filings, Alwaleed and his holding company owned more than 250 million shares of Citigroup.
Alwaleed, worth about $21 billion according to Forbes, is one of the world's richest people. The Saudi prince first acquired a stake in Citicorp, which later became Citigroup, in 1991. According to filings, Alwaleed also is a big investor in media company News Corp and online travel site Priceline.com.
Earlier this year, he was among a group of investors who invested $12.5 billion in Citigroup, as part of an effort by the bank to raise capital.
Citigroup, the nation's fourth-largest bank in terms of deposits, has been one of the hardest hit financial firms during the credit crisis.
Earlier this week, the New York City-based bank unveiled plans to cut its staff levels by more than 50,000 in an attempt to reduce expenses as it braces for what many are anticipating will be a difficult economic climate in 2009.
There has even been talk that changes could come at the top of the organization although the company has strenuously denied such speculation.
At the same time, analysts have warned that the company still faces a large exposure to problem assets, such as mortgages, credit cards and commercial real estate.
Fox-Pitt Kelton Cochran Caronia Waller analyst David Trone noted in a report earlier this week that the bank would likely be forced to take additional writedowns and report another loss in the fourth-quarter.
The bank has lost more than $20 billion in the past four quarters.
Citigroup is also bracing for a tough economic climate in 2009, which could translate to rising losses tied to consumer and business loans.