Bank of America's stock continues to test new lows, despte rally Wednesday.

It has dwindled to the important $5 a share barrier, and frankly no one would be surprised if it sank below that level soon. Stocks that trade below $5 a share are widely considered penny stocks--a distinction that big companies do not value. And there are other implications as well.

A stock perceived to be locked in penny stock territory is all of a sudden treated differently by big institutions, even though the idea that institutions cannot own penny stocks is something of a myth. Still, perhaps by force of mental muscle memory, institutions interpret sub $5 stocks differently.

Bank of America has tested these waters before. In 2009, it's stock sank all the way to $2.53 a share. Hopefully, it will not get that low again. About the only parties that have truly benefited from the extend swoon are the shorts and the high-frequency traders. The party may end for some shorts, as some brokerages preclude customers from shorting stocks below $5 a share, according to CNNMoney.

By the same token, buying such shares on margin is also disallowed. As for high-frequency traders--at least the ones who engage on liquidity rebate arbitrage--they are more than thankful for the stock swoon. It has become the new Citigroup in terms of being the most profitable stock to churn for the sake of maker-taker rebates. At some point, like Citigroup, Bank of America may decide to reverse split, a sad day for the high-frequency rebate crowd.

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