As you may already know, Citigroup traded today at 10 times the amount it was trading on Friday. Wait! Did the stock go up a 1000%. Of course not, it there it was just reverse split, where 10 stocks on Friday were grouped into 1 stock this Monday morning. C is now trading at $44.16, after it was trading at $4.51 on Friday.

Now the question, how did the market react to this reverse split? The quick answer is “Not well”.

The stock dropped 2.3% on more than average volume. Quick note here: the volume on Citi is now misleading, it should be multiplied by 10 to be compared to the average volume, and since there was a volume of 49.29 million shares, then the real volume was 492.9 million shares compared to an average volume of 376 million shares. Note to Google: Please fix the volume to reflect the new reverse split. It would also be nice to fix the other stock data, as we no longer know which one is right and which one is wrong. Anyway, going back to C, it seems that investors didn’t really appreciate the reverse split (which is common mainly in penny stocks), despite that C was upgraded to overweight by Morgan Stanley. Generally, stocks tend to drop until they find a decent support in reverse splits, look at AIB, for example (of course, AIB is, sooner or later, going to a penny).

I believe in C, but I think that bank stocks, in general, are currently in a downtrend and are stuck in this bearish hell. Even the best of news can’t get them out of there, unless big investors decide that it’s time to reverse the trend.

Anyways, despite all this, I think C can easily close the year at around $60 (maybe more), and I think it’ll start going up in a couple of months. Time will tell…