NEW YORK (

TheStreet

) --

Citigroup

(C) - Get Report

saw short interest climb by some 12% in the first half of December even as the stock surged close to the $5 mark following the Dec. 6

announcement

that the U.S. Treasury Department had sold its remaining stake in the banking giant.

Citigroup short interest rose to more than 357 million shares during the first half of December, from less than 294 million shares during the previous period, according to data from the New York Stock Exchange (NYSE). That is still well below the 552 million in

Citigroup short interest

in the first half of March.

Paradoxically, that number started to decline just as the Treasury announced on March 29 that it would begin selling its Citigroup stake.

Short sellers borrow shares of a security in the hope it will drop in price. If they bet correctly, the short sellers can buy the shares at the lower price to repay what they borrowed and pocket the difference. The NYSE publishes short interest data twice a month with a roughly two week lag time, including more detailed information for its 100 most heavily shorted listings.

Citigroup perennially tops the list, just as it regularly shows up as the most actively traded NYSE listing on the long side.

Citigroup shares went on a run for a few days after the Treasury announced it had exited its stake for a $12 billion profit on its $45 billion investment. The shares hit $4.81 on Dec. 14, their highest level since before the May 6 "Flash crash." Citigroup shares have largely moved sideways since then and were trading at $4.79 just before Tuesday's close.

Several other financial stocks saw a modest drop in short interest during the same period at the start of the month, including the

Financial Select Sector SPDR

(XLF) - Get Report

, a popular exchange traded fund (ETF) that tracks financial stocks. That ETF saw short interest drop to about 94 million shares from some 100 million at the end of November.

Other financial stocks that saw modest drops in short interest in the first half of December were

Bank of America

(BAC) - Get Report

, where short interest fell to less than 113 million from just under 114 million shares,

Synovus Financial Corp.

(SNV) - Get Report

, where short interest dropped to some 94 million from just over 100 million, and

Regions Financial Corp.

(RF) - Get Report

, which saw short interest fall to about 58 million shares from nearly 66 million during the previous period.

Regions had seen a roughly

50% surge in short interest at the end of November.

Also seeing a slight drop in short interest in early December were

Wells Fargo

(WFC) - Get Report

and

KeyCorp

(KEY) - Get Report

, while

First BanCorp

(FBP) - Get Report

and

JPMorgan Chase

(JPM) - Get Report

both saw slight upticks in short-selling activity.

--

Written by Dan Freed in New York

.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.