This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Citigroup Reverse Split Still Irks Shareholders

NEW YORK (TheStreet) -- It has been nearly two years since Citigroup (C) decided to do a 10-for-1 reverse stock split, but it is still a sore point for Citigroup's long-time shareholders.

At the bank's annual meeting in New York on Wednesday, shareholders repeatedly urged management to consider a stock split, a move they hope would restore the money they believe they lost as a result of the reverse stock split.

One particularly irate shareholder clamoring for the 10-for-1 stock split claimed to have lost more than $1.5 million as a Citigroup shareholder of more than 30 years. "You guys know what the price of the stock is. It is the same price when we did the reverse split. This stock has to reach $600 for me to break even. Bring it down to $4.65 and then maybe it can climb back up to $60."

However, CEO Michael Corbat and Chairman Mike O'Neill said they backed the reverse-split move. While they remained focused on bringing the share price above tangible book value, the bank won't consider "splitting our way to prosperity," O'Neill said.

"This[reverse stock split] wasn't done to engineer the stock price," Corbat said in response to shareholders. "It was done to reduce volatility and to get shareholders out of the stock who were using it as a trading vehicle."

He added that a reduced sharecount also made it operationally easier for the bank to pay out its dividend.

In May 2011, Citigroup, which was still suffering from the fallout of the financial crisis, decided to dramatically reduce its share count by turning every 10 shares into a single share. The stock that had been trading at $4.52 at the time, began to trade above $40 a share.

Citigroup's then CEO Vikram Pandit and former Chairman Richard Parsons said the purpose of the reverse split was to increase the share of institutional investors holding the stock. Many mutual funds, they argued, are prevented from holding stocks that trade below $5, while others don't buy stocks that don't pay a dividend.

Stock quotes in this article: C 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,449.09 +24.24 0.15%
S&P 500 1,866.84 +4.53 0.24%
NASDAQ 4,103.7750 +17.55 0.43%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs