Citi resumes dividend, will do reverse stock split |
| Houston Chronicle - Mar 21, 2011 |
Citigroup Inc., one of the worst-hit banks during the financial crisis, is taking more steps to get back in the good graces of shareholders.
The bank will reinstate a quarterly dividend, albeit by just a penny per share, and reduce the amount of shares it has outstanding. This second maneuver, called a "reverse stock split," will lift the company's stock price and allow more institutional investors to own it.
Many large investors like pension funds and mutual funds are barred from owning stocks that trade below $5, which has been the case with Citi since early 2009. Under Citi's plan announced Monday, every 10 shares of its stock will be exchanged for 1 new share as of May 6. That will lift the price of each share of Citi stock by 10 times. Since there will be 10 times fewer shares outstanding, the overall value of the company will remain the same.
Citi's stock edged down 5 cents to $4.45 in midday trading. At that rate, each new share of Citi stock would be worth about $44.50 after the reverse split is completed. Citi's stock traded just below $50 in October 2007, before the financial crisis hit.
Read Full Article from Houston Chronicle
- Posted: 2011-03-21 10:53:39
| More Stock Investor Place Company News |
 |
|
|
|
| Stock Investor Place Company News Archive |
|
|
|
