Speculation has been rising as to whether or not Citigroup (NYSE: C) will undergo a reverse stock split as the company’s stock price recovers and as the U.S. Treasury develops plans to sell its 27% ownership stake in the company.
Investors have been debating on online message boards this week as to whether or not Citigroup would undergo a reverse stock split. Some believe that a reverse stock split might be un-necessary with Citigroup’s most recent stock price improvement; however, a reverse stock split may not be off the table.
Citigroup shareholders approved an authorization for the company’s board of directors to expedite a reverse stock split at one of seven ratios during the month of September:
- 1-for-2
- 1-for-5
- 1-for-10
- 1-for-15
- 1-for-20
- 1-for-25
- 1-for-30
At the company’s annual meeting in April, the company plans to propose an extension to the reverse stock split authorization by asking shareholders to approve an amendment which would extend that time frame by one year to June 30th, 2011, according to the company’s proxy statement.
Citigroup declined to comment on the speculation of a reverse stock split.
