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Jon Najarian: Citigroup Reverse Split 'No Magic Bullet'

Citigroup shares struggled on Monday, the first day after a 1-for-10 reserve stock split. Although intended to improve investors' opinion of a company, trader Jon Najarian said a reverse stock split is "no magic bullet."

The optionMONSTER.com co-founder pointed to two recent examples. After AIG went through with a 20-for-1 reverse stock split on June 30, 2009, Najarian said its stock plummeted. This year, AIG's stock peaked at $61 a share.

Priceline , on the other hand, did a 1-for-6 reverse stock split. Afterwards, its stock didn't go anywhere for a considerable period of time before exploding to the upside.

"I would think Citi hangs in here far more than I think it explodes to the upside on this reverse split," Najarian said. "Keeping in mind that the company's the same and really just the stock price and the amount of shares you have were cut 1-for-10, I think that this will be something that will be good longer-term for Citi, but it's not a reason to buy it [now]."

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POPS & DROPS

Stocks rallied on Monday, as energy names pushed higher. The "Fast Money" traders, though, thought these market movers to be the most interesting.

POPS (Stocks that went higher)

U.S. Steel (X) popped 2.7%: This metal fabrication company's stock was oversold, Stuart Frankel's Steve Grasso said. For those interested in the sector, he thinks AK Steel is a "better bet."

Apollo Group (APOL) popped 1.5%: The education and training services company caught several upgrades on Monday, trader Pete Najarian said. It appears as though it has further upside and given the stock has been beaten up lately, he thinks APOL is worth looking at.

Sysco (SYY) popped 12%: The food wholesaler's stock is trading at multi-year highs, yet still has a fairly attractive price-to-earnings valuation ratio, Veracruz founder Steve Cortes said.

DROPS (Stocks that went lower)

Tyson Foods (TSN) dropped 6%: The meat products company reported a disappointing quarter on Monday, RiverTwice Research's Zachary Karabell said. He has shorted the name because of rising chicken prices, but may soon end that trade because he doesn't think Tyson is in "any real trouble."

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CALL TO THE FLOOR: BIOTECH CONSOLIDATION

Discussing the merger of drug manufacturers Alkermes and Elan with Richard Pops, Alkermes chairman & CEO.

Watch the video to see the full interview.

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Trader disclosure: On May 9, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Cortes owns (EXC); Cortes owns (SO); Cortes owns (TGT); Cortes owns (KFT); Cortes owns (K); Cortes is short Eur vs. USD vs. CHF; Cortes is short Nasdaq Futures; Cortes is short crude; Cortes is short EEM vs. S&P long; Karabell owns (SLV); Karabell owns (AAPL); Karabell owns (CSCO); Karabell owns (GOOG); Pete Najarian owns (PFE); Pete Najarian owns (MRK); Pete Najarian owns (AAPL); Pete Najarian owns (TCK); Pete Najarian owns (AKAM); Pete Najarian owns (C); Pete Najarian owns (HPQ); Pete Najarian owns (TEVA); Pete Najarian owns (MS); Pete Najarian owns (RSX); Pete Najarian owns (GE); Pete Najarian owns (MSFT); Pete Najarian owns (YHOO); Pete Najarian owns (VLO); Pete Najarian owns (TER); Pete Najarian is long (RIMM) calls; Pete Najarian is long (AVL) calls; Pete Najarian is long (NTAP) calls; Pete Najarian is long (XLF) calls; Pete Najarian is long (PMCS) calls; Pete Najarian is long (CVS) calls; Pete Najarian is long (XL) calls; Pete Najarian is long (BSX) calls; Pete Najarian is long (HBC) calls; Pete Najarian is long (EWZ) calls; Pete Najarian is long (XLI) calls; Pete Najarian is long (FCX) calls

For Steve Grasso:
Stuart Frankel & Co and it’s partners own(ABX)
Stuart Frankel & Co and it’s partners own (CSCO)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (EWJ)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HPQ)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (MSFT)
Stuart Frankel & Co and it’s partners own (MU )
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners own (TOL)
Stuart Frankel & Co and it’s partners own (UAL)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners are short (QQQQ)
Stuart Frankel & Co and it’s partners are short (AAPL)

For Zach Karabell:
River Twice Capital is short (TSN)
River Twice Capital is short S&P 500
River Twice Capital is short (QQQ)

For Jon Najarian:
**No Disclosures



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