Citigroup reverse stock split May 6

[Mr Nice Guy]

Thanks JPG

[Slug]

Personally?

No. None.

Essentially no. But I did see this double bottom super topped Z triangle then I realized it was a VW hood ornament.

[Mr Nice Guy]

Essentially no. But I did see this double bottom super topped Z triangle then I realized it was a VW hood ornament.

Lmao

[abw1987]

Silly question perhaps - what happens in a 10:1 reverse split if you do not own a number of shares that is divisible by 10? Or in a 2:1 reverse split when you do not own an even number of shares? As I understand you cannot own fractions of shares. Do you just get credited with the cash value of the remainder of non-divisible shares?

Luckily I own a multiple of 10 in Citibank so I do not have to worry about this.

[jpg7n16]

Silly question perhaps - what happens in a 10:1 reverse split if you do not own a number of shares that is divisible by 10? Or in a 2:1 reverse split when you do not own an even number of shares? As I understand you cannot own fractions of shares. Do you just get credited with the cash value of the remainder of non-divisible shares?

Luckily I own a multiple of 10 in Citibank so I do not have to worry about this.

The company would likely redeem the resulting fractional shares for cash. Found this about the reverse split of FAS and FAZ:

From: http://www.direxionshares.com/pdfs/PR_070609.pdf

Redemption of Fractional Shares and Tax Consequences for each Reverse Split

As a result of the reverse splits, a shareholder of FAS or FAZ could potentially hold a fractional share. However, fractional shares cannot trade on NYSE Arca. Thus, FAS and FAZ will redeem for cash a shareholder’s fractional shares at the Funds’ respective split-adjusted NAVs as of July 8, 2009. Such redemptions could cause a shareholder to realize a gain or loss in connection with the redemption of the shareholder’s fractional share. Otherwise, the reverse split will not result in a taxable transaction for holders of FAS or FAZ shares. No transaction fee will be imposed on shareholders for such redemption.

[jteezie]

There's no real change in the stock. Instead of 10 shares x $5 (or whatever it is), it is now 1 share x $50 = $50 both ways.

The difference is psychological. Investment managers (people who manage 401k, hedge funds and stuff), do not like to buy "cheap" (<$5 stocks). Sorta just a policy. So at $50, C looks more reputable. If you were some small no name company, by going over $5, you might eventually get spotted and followed by some analyst who eventually recommends a buy of your stock. Everyone knows C so this really isn't the factor.

There may be some liquidity factors as well. C may not like seeing small investors playing with their stock because it looks cheap.

What OP is thinking regarding the price movement is the company is reducing their overall number of stock shares. Lets look at an example of the wrong math. C issues 100 shares total in the market at $5 each. Thats a market cap of 100 x 5= 500. the Reverse stock split reduces C shres to 10 shares. $500 / 10 = $50 per share. OP thinks he will continue to own 10 shares but at $50 = $500 (that's the entire market cap of the company, so clearly you don't suddenly own the whole company). In reality, OP now owns 1 share x $50.