Comments on: Citi Reverse Stock Split: Is It Good for the Stock?

By: Jae Jun

Jae Jun — Sun, 29 Mar 2009 02:12:03 +0000

Since most institutions are not allowed to buy or own companies that are below $10, it should prevent some from selling their positions. Doesn’t add value at all but many investors are fooled into thinking it is worth more.

By: the weakonomist

the weakonomist — Tue, 24 Mar 2009 15:28:49 +0000

This may be a reaction to the Dow’s consideration of dropping Citi from their list. They hadn’t had penny stocks in the Dow before and it made everything look bad.

A reverse split is superficial at best, but in a superficial world it could help.

By: frugal living

frugal living — Tue, 24 Mar 2009 06:45:03 +0000

Stock splits generally are on a two-for-one basis (two shares of new stock are made exchangeable for one share of old). For example, a two-for-one split would leave the owner of 100 shares of old stock worth $90 per share with 200 shares of new stock worth $45 per share. All a split actually does is increase the number of outstanding shares.

By: Tim

Tim — Mon, 23 Mar 2009 21:56:46 +0000

it will only be good if it prevents institutional investors from being forced to drop the stock. I read somewhere that institutional investors were going to wait until June to determine to drop citi stock if it fell and stayed below the $5 mark.

i thought companies split stock when they believe that the stock price is too high attract investors, unless they are talking institutional investors.