Recall that Citigroup (NYSE: C) proposed a reverse stock split last year, and it seemed like a decent idea when the stock seemed on the verge of permanent penny stock status. But then the stock rallied ferociously, and the idea moved to the back burner.

TheStreet.com has revived the issue, however, noting that Citigroup proposed to extend the board of director's ability to implement a reverse stock split through June 30, 2011. While the measure was ultimately passed, more than a few shareholders at the meeting were upset that the option for a reverse split would remain on the table.

The anger perhaps stemmed from the long-standing stigma associated with a reverse stock split. Usually, they are reserved for companies on the brinks, with little hope of their stock price rising past penny-stock levels. But Citigroup is really not in that category, and there are several reasons why a reverse split would make sense. TheStreet.com notes it might allow for more institutional ownership and would likely make it easier for the Treasury to exit its massive stake. Now that the stock is falling again, we may hear more talk of this. 

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