Citigroup Reverse Split Update August 2011

Today's article provides a Citigroup reverse split update for August, 2011, following up after a couple of previous articles I've written about "C" (and linked to below for reference).

I started writing about Citigroup's mention of a planned reverse stock split back in March, 2009 (this was very shortly after the major U.S. market indices bottomed on March 9, 2009).

At the time, I really didn't think that I would have so much to write about on the topic but since then, this makes the 5th related article I've written.

There are a couple reasons I initially decided to write on the headline: 1) reverse stock splits to me, are rarely a positive sign from a company. 2) reverse stock splits to me, can sometimes even be considered an act of desperation and attempt to manipulate investors.

Since the first article I wrote, the stock price action has proven to be a classic textbook example of what I was trying to convey in my articles and thus continuing to catch my attention and write follow up articles.


Some quick background on Citigroup's stock price history in reference to the reverse stock split:

  • On March 5, 2009, Citigroup's stock (ticker symbol "C") reached an intraday low of $0.97
  • On March 19, 2009, the initial day of the announcement of the "planned" reverse stock split, the price of "C" jumped approx. 30% intraday up to $3.89 and later closed that day at $2.60
  • On March 21, 2011 "C" announces definitively that they will be performing a 1-for-10 reverse stock split effective May 6, 2011. Shares close the day at $4.43
  • Shares close on Friday May 6, 2011 at $4.52 per share and open Monday May 9, 2011 at $44.89 (slightly lower the the $45.20 reverse stock split equivalent.

The weeks leading up to the period between when "C" began trading post-reverse stock split, the chart pattern displayed an early warning sign for anyone thinking this move was a good idea: Citigroup begins trading post-reverse stock split May 9, 2011.

During the first 2 weeks post-reverse stock split, "C" broke down out of it's pattern and dropped approx. 11% in only 2 weeks Citigroup Update 2 Weeks Post Reverse Stock Split

Following up today, August 28, 2011, almost 4 months after the reverse split became effective, "C" closed the trading day on August 28, 2011 at $29.84, down 34% from the last day of trading pre-reverse stock split.

Citigroup Reverse Stock Split Update August 2011

I'll try and keep myself from writing yet another follow up article on the reverse split itself as a 34% move in the direction expected is more than enough to use as a great example in the future for those interested.

BTW: the recent closing price of $29.84 would be equal to $2.98 back in 2009... once again below the limit many large funds are restricted from trading and investing in.




Return From "Citigroup Reverse Split Update August 2011" To "Stock Market Commentary"


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