(Includes closing stock prices.)
NEW YORK ( TheStreet.com ) -- Citigroup's (C) stock jumped nearly 12% on huge trading volume Tuesday, two trading days after the company issued new common shares in exchange for preferred stock held by investors.
Citi's stock, which reached as high as $3.01 in trading Tuesday morning, closed up 28 cents, or 10.4% to $2.97. More than one billion shares traded hands in regular trading Tuesday, compared to a three-month daily average volume of 278 million.
The exchange offer, announced in February, has made the government Citi's largest stakeholder, holding roughly 34% of the company's shares. Citi's total shares outstanding were expected to jump to as much as 23 billion from the completion exchange vs. 5.5 billion at June 30.Citi's stock, which has hovered around $3 a share for most of this year, has been hampered by the arbitrage trade for much of this year where institutional investors and hedge funds have taken long positions on Citi's preferred stock, while shorting the common stock. Some observers said that the stock would rise once the conversion was complete as the shorts were forced to unwind their positions. But Citi shares closed down on Monday, despite the completion of the exchange offer. A Citi spokeswoman said that shares from the exchange will be delivered into clients accounts on Thursday. She declined to comment regarding the jump in stock price.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV