Tech & Biz

Citigroup Seeks Reverse Stock Split

by Jordan Yerman | March 19, 2009 at 07:03 am

245 views | 0 Recommendations | 1 comment

Us banking corporation Citigroup, having sucked up $45 billion in bailout money, is considering a reverse stock split, which would give the US government a 36% stake in the financial giant.

A reverse stock split is a consolidation of existing shares, with the intent of creating more value per unit. This move can be initiated by a company's board of directors without shareholder approval.

Citigroup, which took $45 billion from the government's Troubled Asset Relief Program, also defended spending $10 million to renovate executive offices at its Park Avenue headquarters, saying the project will save more than it costs.

The reverse split could be for 1-for-2, 1-for-5, 1-for-10,

1-for-15, 1-for-20 or 1-for-30, the company said in an SEC

filing.

Companies often split their stock when they believe the price of their stock is too low to attract investors to buy their stock. Some reverse stock splits cause small shareholders to be "cashed out" so that they no longer own the company’s shares.

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Banking (not verified)

at 13:37 on July 23rd, 2009

What do you think of Citigroup? I think they will be ok.

They need to do the following.

1) 100 to 1 reverse split.
2) Write off 500 billion in bad debt, goodwill, intangible assets.
3) Issue 1000 million shares of the new $250/ share priced stock.
4) Fire 25% of the employee base.
5) Hire 100,000 new people via the job fair.

We feel that the job fair is very incridibly fair. You should respect yourself, you work hard and the banking industry is very important to us.

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The Stock Market is generally up.

The Housing Market is generally up.

The Money Supply is generally up.
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The stock market falls when it has gotton ahead of the money supply.