The fact is now Citi does not consider a RS ("it is put on back burner." - from last annual meeting)
So, why not just buy and hold C for at least the foreseeable future before a RS if any - who expects PPS will be below $3 in current conditions?
The fact is that any public traded company will consider a RS if it is considered "good" in overall for the company's own health and development, and Citi is not an exception. In addition, since AIG's example is still fresh, and the economy is just about to or might start solid recoveing, how stupid would Citi consider it now.
The fact is that even Citi eventually has to do a RS for the reasons listed in any financial textbook. It will turn out either nothing to be worried about if the overall economy has improved significantly and if Citi starts making profit and has a strong outlook, or at least the whole RS preparatory process will give you, retail investors adequate time to retreat or stay on in course (To do a RS, it has to be first discuss it, vote for and pass it, and set a time for actually implementing it).
So, the fact is that if Citi does want to do a RS in the future, you as retail investors who hold from dozens of shares up to a hundred of thousand shares or so) will have adequate time to resolve the issue for your own interests based on your best knowledge (as compared to the institutional investors, for them it is much difficult to act).
An before any major dump, the institutions will first ratch up the PPS, which has been always the case which will give you a plenty of opportunity of selling your shares.
At this jucture, I just do not see any reasons of not holding or buying some and holding C now.
Disclaimer: I personally hold 30K at average cost of $3.06
I don't fear a reverse split because I don't have any shares...why the hell should I care? It's moneyless society time, all world economies will fail and one world currency is the antichrist and a moneyless society will be the next second coming of Jesus and he will throw the money and the money changers into the bottomless pit, after CERN gets it going and creates a black hole in their lab over in Europe. The first thing to be swallowed up will be the Tower of BASEL in switzerland and then the IMF, The World Bank and the Federal Reserve will all perish. All money will perish from this earth ridding it of all evil.
I have 15000 at 2.67. Do I just hold or sell on a good upturn and buy the shares back on the down. This is what always happens when I just sit and hold. What will you do with your shares?
You say "The fact is that even Citi eventually has to do a RS for the reasons listed in any financial textbook." I don't see any textbook reason why Citi has to do a reverse split. If Citi puts out a good 3d quarter report showing its worst loan losses are behind it (far from certain, but possible), the stock could jump up to $5. At that point what would be the benefit of a reverse split? Please explain the textbook reason why you say Citi "has" to do a reverse split?
"I don't see any textbook reason why Citi has to do a reverse split. If Citi puts out a good 3d quarter report showing its worst loan losses are behind it (far from certain, but possible), the stock could jump up to $5. At that point what would be the benefit of a reverse split? Please explain the textbook reason why you say Citi "has" to do a reverse split?"
First of all, Citi or any other publically traded company does not have to do a RS, particularly, if PPS is well above $5, which removes one of the benefits of doing a RS by attracting major funds (most time this reason may just be an excuse for company to do a RS). With the assumption you made on Citi's earning outlook, it makes it less possible for Citi to do a RS.
So, the one major possible reason that Citi still wants to do a RS in the future is to control the massive float of shares so that it can stabilize price fluctuation, save management fee, and so forth.
But, the "actual reason" for doing a RS may be sometimes just because these pompous bankers want to brag that how strong their stock prices are.
We are living in such a strange world, but I hope that Citi as an responsible and badly beaten down giant should act in a more responsible and sensible way in the future.
doing a rs is very risky for citi in the current environment. look at aig. i think rs will make sense down the road when the company is profitable. i don't beleive citi will do a rs in the near future. jimho