Citigroup's (C) Reverse Stock Split Has Killed the Stock
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Citigroup's (NYSE: C) recently completed 1-for-10 reverse stock split has proven to be a flop so far.
Shares of the global bank are down 11 percent since the reverse split, versus the 3.7 percent slide in the ETF Financial Select Sector SPDR (NYSE: XLF) since that time.
As expected volume has collapsed in the stock since the reverse split. Shares that were trading on average of 400 million shares per day, are now trading on average of 42.4 million. Interestingly, while share volume has fallen sharply dollar volume has been the same or better.
Citigroup's CEO Vikram Pandit promised the reverse split would "reduce volatility while broadening the base of potential investors." So far it could be argued that it has done the exact opposite.
Shares of the global bank are down 11 percent since the reverse split, versus the 3.7 percent slide in the ETF Financial Select Sector SPDR (NYSE: XLF) since that time.
As expected volume has collapsed in the stock since the reverse split. Shares that were trading on average of 400 million shares per day, are now trading on average of 42.4 million. Interestingly, while share volume has fallen sharply dollar volume has been the same or better.
Citigroup's CEO Vikram Pandit promised the reverse split would "reduce volatility while broadening the base of potential investors." So far it could be argued that it has done the exact opposite.
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