May 10, 2011 | In: Financial

Citigroup Reverse Split Aftermath: It Wasn’t Great!

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…

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5 Responses to Citigroup Reverse Split Aftermath: It Wasn’t Great!


Will BAC Trade Below $10 Today? « Fadi El-Eter

July 12th, 2011 at 9:02 am

[…] I wouldn’t be surprised if Bank of America will do a reverse split, similar to the one that C did back in May (by the way, C is down 13% after the reverse split). Tags: BAC, […]


Are Reverse Splits Good for Stocks? « Fadi El-Eter

July 13th, 2011 at 12:23 am

[…] and more reverse splits taking place. The latest prominent reverse split was Citigroup’s, which outcome wasn’t (to say the least) impressive. When there’s a reverse split, new investors wonder, is that good for the stock? Is it a good […]


Is Citigroup Undervalued? « Fadi El-Eter

August 5th, 2011 at 10:08 am

[…] the wake of yesterday’s horrors. It is trading at a one year low (of course, after taking the reverse split back in May into consideration) of $34.81 (that’s only $3.48 before the reverse split). The stock right […]


What Time Does Pre-market Trading Begin? « Fadi El-Eter

October 3rd, 2011 at 11:59 am

[…] account on my broker’s website, and I saw that C was so delicious at around $3.80 (that was before they did the reverse split). I placed the order at around 8:00 AM, but the order was not filled immediately. I waited for 1 […]


Bank of America (BAC) Reverse Split Soon? « Fadi El-Eter

January 15th, 2012 at 1:22 am

[…] a very comparable bank, already did a 1:10 reverse split earlier this year, so, BAC will not make a bold move by doing so. It’s been done before by a very similar […]

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