Recall that Citigroup reverse split its stock back in May, exchanging one share at $45 for every 10 shares trading at $4.52. The company's goals were to get the stock price out of the penny stock zone in order to be able to better market it to big institutions and perhaps to change its status as the darling of high-frequency traders, though they added a lot of liquidity.

But since May, the stock has continued to swoon. It's now down 40 percent roughly since the reverse split. Ouch. This is certainly a precipitous drop, one that reflects a lot of overall market uncertainty that has done a number on the entire class of bank stocks. So we should probably reserve judgment as to whether the move worked. But the effects of the reverse split are no doubt being closely watched by Bank of America, which has similarly dwindled into the penny stock zone.

Executives so far have seen nothing that would dispel the idea that such a move is a panacea leading instantly to a higher price and higher institutional ownership. This is yet another vexing problem for  Brian Moynihan, for which there is no easy answer. At some point, a reverse split may be the best option. If the stock is on the verge of being tossed out of major indexes and more institutions sell because they are not allowed to own low-priced stocks, it may have to do something. If the stock continues to dwindle, this becomes an issue. This has no doubt been discussed.

For more:
- here's a Barron's article on reverse splits

Related articles:
Hedge fund managers duel over Bank of America  
Dark pools hit hard by Citi reverse stock split  
Citi's new dark pool aims to link HFT and retail investors