Citigroup completed its 1:10 reverse-split, a move that may prove beneficial to shareholders sometime in the future.  On DAY ONE, however, it's anything but.  At 2:45 p.m., Citi shares were trading at $44.10, down 2.6%.  They traded as low as $43.85. 

So, while the reverse split has Citi stock trading in double-digits for the 1st time since November 2008, the strategy has, at best, a mixed track record.  Often, companies will engineer a reverse split to keep from being delisted because their stock price has fallen through $1 a share. Many of those companies still don't survive.  For larger companies, the odds are better, though they often take a short-term hit.  Data from Birinyi Associates shows Russell 1000 stocks that have enacted a reverse split since 1990 have seen an average decline in their stock price of 1.6 percent 30 days after the split.  Priceline.com was one large company to succeed - it did a reverse split in 2003 when shares were trading below $5 a share, and now trades at about $530 a share.

There is at least one bull in Citigroup's Corner.  It's Rochdale Securities analyst Dick Bove, who has high hopes for Citigroup stock.  Once the reverse split-related noise is complete, "Citigroup's earnings power is growing meaningfully." 

Citigroup shares fell on the day in March when the bank announced its reverse split, and industry observers had forecast they would fall again on Monday - as they have.   [Reuters, 5/9/11]

    Note:  Read about ramifications of Citi's reverse split - in the 5/9/11 Behind The News story.