Citigroup (NYSE: C) is recently trading at $3.42 in pre-open trading, above its close of $3.08. C plans to seek shareholder approval to both increase the number of shares outstanding and undertake a reverse stock split as part of the company's effort to exchange common stock fro preferred securities. C announced on February 27 "Citi will offer to exchange common stock for up to $27.5 billion of its existing preferred securities and trust preferred securities at a conversion price of $3.25 a share. The U.S. government will match this exchange up to a maximum of $25 billion face value of its preferred stock at the same conversion price." C March 4 straddle closed at $1.19, April 4 straddle is priced at $1.06, June 4 straddle is priced at $2.60 according to Track Data, suggesting large price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Medical staffing agency TeamStaff Inc. (NASDAQ: TSTF) is in the process of restructuring both its finances and its business model in order to return the company to operating profitability and push its stock price above the minimum $1 per share for continued listing on Nasdaq. Currently, TeamStaff's board of directors has authorized a reverse stock split as part of the company's response to a Nasdaq Staff Determination letter indicating TeamStaff was in violation of the $1.00 per share minimum for Nasdaq listing. The company has sold its DSI PayrollServices unit and is exiting the nursing per diem business segment. Instead, TeamStaff will supply contract medical staffing needs for the Department of Veterans Affairs and Department of Defense health care facilities.

The company posted $400,000 in income for 4Q 2007 and returned to profitability, barely, for the quarter. For FY2007, however, gross profits were flat. The good news is that losses from continuing operations are much smaller for FY2007, $3.4 million or ($0.17) per share, in contrast to FY2006 losses of $18.5 million of ($0.96) per share. TeamStaff recently appointed Cheryl Presuto as CFO and hopes to return to sustained operating profitability in 2008.

Sun Microsystems (NASDAQ: JAVA) followed the announcement of its ticker symbol change with a plan for a 1-for-4 reverse stock split [subscription required]. That would put the stock in the $20 range at current prices.

It won't matter. Sun's shares are off about 10% over the last six months while larger rivals Hewlett-Packard (NASDAQ: HPQ) and IBM (NYSE: IBM) are up more than 20%.

Management at Sun believes that a low stock price, under $10, makes it appear as if the company was still "struggling to overcome its post-dot-com era slump." Perhaps a higher stock price could change that perception in the eyes of investors. As management said to The Wall Street Journal, competitors pointed to Sun's stock price to sway "naive customers who might not be able to look beneath the surface.''

Sun is underestimating the intelligence of enterprise server buyers. They do not buy Sun products not because of its stock price but because they can get a broader product range from companies like HP. Sun has had no success in getting robust demand for its products. In the last quarter, revenue was flat with the same quarter a year ago with only cost cuts improving the bottom line.

Sun has tried almost everything now from share buy-backs to ticker changes.

The company's problem is that it has no evidence of a real recovery to point to.

Douglas A. McIntyre is a partner at 24/7 Wall St.