Citigroup Plans Reverse Stock Split - It'll Now Be Easier To Short

When a stock drops to 99 cents, a move of 30 cents is enough to cause significant consternation if one is short. It also gives an appearance management might be clueless. Obviously, as I have read in the press over and over and over again, nothing could be further from the truth. Wall Street only hires the best and brightest. What better way to convey that message than a reverse stock split. If Citigroup would do half a dozen of these splits or an eighty or one hundred to one reverse split, the stock would be high enough to be an attractive short again. A higher stock price would obviously be more representative of the strength of Citi's management. And, why earn that price through effective strategy and management when the taxpayers will pay for a paper transaction that can be completed in the blink of an eye?

How much money is involved in doing a reserve split? I suspect the cost is a relatively substantial waste of bureaucratic paper pushing. Something Wall Street is good at. I wonder who might be paying for this? Oh, yeah. The same people paying for the Citi CEO's new $10 milion office. That would be you.

Now, what price will the company trade at with that reverse split? I need to line up my next short trade. I figure it will probably be the only way the American people will get some of their bailout money back.