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Tacomatight (55.63)

(C) Citigroup Reverse Split?!?

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3

April 20, 2010 – Comments (3) | RELATED TICKERS: C

I was just reading RealMoney's blog on the C annual meeting taking place now. In it they were talking about Treasury using it's voting rights. One of the propsals discussed was a reverse split. Does anyone know about this? I follow this stock very carefully and this is the first I've heard.

"Treasury also voted in favor of two Citigroup proposals that fall within its discretionary voting rights.  One is to permit the company to issue common shares to settle $1.7 billion of "common stock equivalent" awards to employees in lieu of cash incentive compensation.  Citigroup committed to the Federal Reserve that it would issue such shares as part of the terms under which it was permitted to repay a portion of its TARP assistance last December.  The second proposal is to permit a reverse stock split which will address the fact that the company has a much larger number of shares outstanding than is necessary to ensure adequate trading liquidity."

The Department of Treasury web link to article:

http://www.treas.gov/press/releases/tg647.htm

3 Comments – Post Your Own

#1) On April 20, 2010 at 2:59 PM, brickcityman (< 20) wrote:

Funny... I never got that proxy in the mail... 

 

I would have expected that I'd be consulted given that I funded, or am in debt for, a portion of that purchase...  Or is this like a mutual fund kind of deal where we just trust the nice smart men in pinstripe suits to make our decisions for us?

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#2) On April 20, 2010 at 3:09 PM, awallejr (79.94) wrote:

They did mail out an authorization to do a reverse split (up to 7 to 1 if I recall) back when they sent out materials on the preferred to common conversion.  I think in the end they really have to.  There are simply too many common shares outstanding. 

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#3) On April 20, 2010 at 3:37 PM, davejh23 (< 20) wrote:

Trading of Citigroup shares has made up a significant portion of total volume recently, and they still can't get the share price above $5.  They need to get the share price up a bit more for institutional investors to jump in (and for the gov't to get out), and the reverse split would be the quickest way to boost the stock price.  In any case, reverse split or not, I'd say the shares are worth precisely $0.00.

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