Updated with further information on Treasury's reported plan to sell its stake in Citigroup.NEW YORK ( TheStreet) -- Citigroup ( C) shares were chugging 5% higher on news that the U.S. Treasury was planning to begin selling its one-third stake in the company in a pre-set trading program. Bloomberg reported earlier Thursday that the plan would lock the Treasury into a pre-set schedule to unload its 27% stake in Citigroup. The Treasury's program would be similar to that of a 10b5-1 program, which is used by many executives and directors of public companies to buy and sell shares of a company at prearranged times without being at risk of insider trading. The plan could be announced as early as next month. The Bloombergarticle noted that Treasury would be able to "issue instructions on how many shares to sell, when to sell them and at what price, while eliminating concern that the sales are based on non-public information." Wall Street has been waiting for news that the Treasury would begin selling its Citigroup stake, particularly as its lock-up period expired on March 16. Observers say the government ownership is one reason why Citigroup's stock is stuck below $5. The U.S. government injected $45 billion into the struggling Citigroup in late 2008. Citigroup, in conjunction with a $17 billion equity offering in December, repurchased $20 billion worth of trust-preferred securities under the Troubled Asset Relief Program and terminated its loss-sharing agreement with the Treasury on some $300 billion of assets. Citigroup shares were rising 22 cents to $4.37. More than 553 million shares had changed hands by 1 p.m. EDT. Speculation also was surfacing on some message boards Thursday about whether Citigroup would undergo a reverse stock split. Investors were debating whether a reverse split was needed with Citigroup's recent stock price improvement. A reverse stock split may not be off the table. Citigroup shareholders in September approved an authorization for the board to expedite a reverse stock split at one of seven ratios - 1-for-2, 1-for-5, 1-for-10, 1-for-15, 1-for-20, 1-for-25 or 1-for-30, and to reduce the number of shares outstanding. However, that authorization expires on June 30. At its annual meeting next month, Citigroup plans to propose an extension of the reverse split authorization by asking shareholders to approve an amendment to extend that time frame by one year to June 30, 2011, according to Citigroup's proxy statement. Citigroup declined to comment on the recent speculation. Separately Citigroup announced on Thursday that it would participate in the government's 2MP loan modification program, designed to help struggling borrowers with their second lien loans. It joins other large mortgage servicers JPMorgan Chase ( JPM), Wells Fargo ( WFC) and Bank of America ( BAC) as participants in the program -- Written by Laurie Kulikowski in New York.