Citigroup (C) announced a reverse, 1-for-10 stock split, which will effectively reduce the pool of outstanding shares from 29.1 B to 2.91 B. The effect on the stock price will be marked, as the stock should trade in the $44 neighborhood, rather than the current $4.40 level. This reverse split should take effect in the fourth quarter.
The good: "Penny Stock" might as well be a four letter word that, when uttered anywhere on financial television, attracts unwelcome attention from the FCC. C's current trading range around $4.40 qualifies it as an aforementioned cursed "penny stock," unable to be picked up by a large number of mutual and hedge funds, whose rules prevent trading in this low-dollar, "speculative" (thank you Jim Cramer for naming this stock your speculative pick for 2011) financial company. However, just like magic, the stock will trade at $44, well above most funds' threshold levels. So
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