NEW YORK — Citigroup's surprisingly low pricing of a stock offer this week provides a clear sign that investors are still nervous about the banking giant's ability to regain its financial health.

On Wednesday, Citigroup Inc. said it would sell 5.4 billion shares of stock at a price of $3.15 per share to help repay $20 billion in government bailout loans. That price was 9 percent below where shares were trading before the announcement.

"The market is not buying the Citi story right now," said Alois Pirker, a research director at financial consultancy Aite Group.

The U.S. government also balked at the deal, stepping away from selling a portion of its nearly 34 percent stake in Citigroup.

Citigroup shares tumbled 25 cents, or 7.3 percent, to close at $3.20 Thursday. They fell as low as $3.13 earlier in the day.

New York-based Citigroup has been among the hardest hit banks by the credit crisis. It earned $101 million during the third quarter before accounting for preferred stock dividends and the debt exchange that gave the government a stake in the bank. Including those items, Citi lost $3.24 billion.

The bank has to deal with loan losses that continue to pile up. It set aside $8 billion during the third quarter to cover loan losses. Citi must also find buyers for some of the risky investments that got it into this predicament in the first place — Citi separated its risky assets into a separate division earlier in the year.

And Citi now has to fight fraud claims by Abu Dhabi's main sovereign wealth fund, which is looking for compensation or to exit a $7.5 billion investment, saying the bank misrepresented its health.