scholarly journals Normal and reverse stock splits in the V4 countries

2016 ◽  
Vol 13 (4) ◽  
pp. 95-105 ◽  
Author(s):  
Manuela Raisová ◽  
Martin Užik ◽  
Christian M. Hoffmeister
Keyword(s):  
Stock Returns ◽  
Stock Prices ◽  
Stock Price ◽  
Abnormal Returns ◽  
Stock Splits ◽  
Announcement Date ◽  
Reverse Stock Splits ◽  
Stock Split ◽  
Reverse Stock Split ◽  
A Company

The economic crisis has forced managers of joint stock companies to look for short-term solutions for the sharp changes in stock prices of their companies. Even the companies of the V4 countries are not the exception. The authors have focused on those companies where have been used either reverse stock split or stock split. They analyzed the effects of the reverse stock split or stock splits on the abnormal returns of stocks. In this paper, the authors analyzed a dataset from 1993 until 2015 with 124 reverse stock splits and 184 stock splits in total focused on the stock market in V4. Based on their own research they conclude that when reverse stock splits were used stock returns significantly decreased one day around the announcement date. They conclude that managers of a company might use this instrument to move the stock price back to the optimal trading range outside of the penny stock area. In the case of stock splits, the authors concluded that the use of this tool results in a significant increase in the returns of a stock after the announcement date. However, the results are in contrast to some former studies which found no positive effect on the returns caused by stock splits. The authors conclude that managers of a company might use this instrument to transport information content of future (positive) performance of a company to the traders. Keywords: Vysegrad group countries, normal stock split, reverse stock split, abnormal returns. JEL Classification: G11, G23, G32

scholarly journals Analisis Pengaruh Stock Split Terhadap Harga Saham, Abnormal Return Dan Risiko Sistematik Saham Perusahaan (Studi Pada Perusahaan Yang Terdaftar Di Bei 2016-2018)

2019 ◽  
Vol 4 (1) ◽  
pp. 95
Author(s):  
Nindi Vaulia Puspita ◽  
Kartika Yuliari
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Abnormal Return ◽  
Systematic Risk ◽  
Stock Splits ◽  
Reverse Stock Splits ◽  
Stock Split ◽  
Before And After ◽  
Reverse Stock Split ◽  
Corporate Actions

The purpose of this study is to analyze the effect of stock split on stock price, abnormal return and systematic risk of stock, The sample in this study as many as 82 companies  are doing stock splits in the period 2016-2018 with the requirement that no other corporate actions such as mergers and acquisitions or reverse stock splits. The result indicated there are differences in stock prices and abnormal return before and after the stock split event, and the systematic risk no difference after and before the stock split event. This condition because of the strong internal factors of the company, this is indicated by no effect of systematic risk (beta) on stocks due to unstable market because investors buy stocks in the short term so they are not affected by systematic risk. Penelitian bertujuan untuk melakukan analisis pengaruh stock split terhadap harga saham, abnormal return dan risiko sistematik saham, sampel penelitian terdiri dari  82 perusahaan yang melakukan stock split dalam rentang waktu 2016-2018 dengan persyaratan tidak ada corporate action yang lain seperti merger dan akuisisi ataupun reverse stock split. Hasil penelitian menunjukkan terdapat perbedaan harga saham sebelum dan sesudah peristiwa stock split, adanya perbedaan abnormal return sebelum dan sesudah stock split dan  yang terakhir risiko sistematik menghasilkan tidak adanya perbedaan setelah dan sebelum adanya peristiwa stock split, kondisi ini karena kuatnya factor internal perusahaan, hal ini ditunjukkan dengan tidak adanya pengaruh risiko sistematik (beta) terhadap saham yang disebabkan kondisi pasar yang tidak stabil menyebabkan investor membeli saham dengan tujuan jangka pendek sehingga tidak terpengaruh dengan risiko sistematik.

scholarly journals Impact of splits on stock splits ratios around announcement day: empirical evidence from India

2020 ◽  
Vol 17 (3) ◽  
pp. 345-359
Author(s):  
Anjali Gupta ◽  
Purushottam Kumar Arya
Keyword(s):  
Stock Returns ◽  
Stock Prices ◽  
Positive Impact ◽  
Abnormal Returns ◽  
Stock Splits ◽  
P Value ◽  
Share Prices ◽  
Stock Split ◽  
Percentage Basis ◽  
The Impact

Stock split should not have any impact on share prices, and there should be no value creation. The purpose of this study is to find any impact of stock splits announced in India between 1999 and 2019 on stock returns. The study aims to find differences in the impact of stock splits on stock returns with differences in stock split ratios. To examine the impact, the study includes 224 splits and adopts the standard event study methodology to find results. The presence of an abnormal return around split announcement day is the main factor, which determines the impact of stock split on the stocks. Average Abnormal Returns and Cumulative Average Abnormal Returns on percentage basis, z-test and p-value are used to statistically analyze the impact on stock prices around the announcement day of splits. These tests are used across different window periods (e.g., 20 days, 10 days and 5 days) around the event day (announcement day) to check if the impact of the event continues or decreases over time. The results point to a significant positive impact of stock splits on the returns of stock around the day the split was announced. The results also show that the impact is stronger for stock splits with ratios 10:1 (2.72 percent) and 10:2 (2.14 percent). It can be suggested that 10:1 and 10:2 are the most popular split ratios that receive maximum ongoing response to splits in the announcement window.

AN ANALYSIS OF ABNORMAL RETURNS ASSOCIATED WITH STOCK SPLIT

2021 ◽  
pp. 1-14
Author(s):  
JYOTI PANDEY ◽  
VINAY KANDPAL ◽  
NEERAJ NAUTIYAL
Keyword(s):  
Stock Returns ◽  
Stock Prices ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Market Model ◽  
Stock Splits ◽  
Event Window ◽  
Stock Split ◽  
Secondary Information ◽  
The Impact

A stock split is when a company’s outstanding shares are divided into multiple shares by issuing more shares to current shareholders without eroding their stake’s value. The company typically takes these actions to increase liquidity and marketability, lower stock prices, attract new investors and so on. The purpose of this study is to examine the impact of stock splits on the stock returns during the study period. Companies listed on the Bombay Stock Exchange (BSE) and those included in the S&P BSE 500 Index are included in the stock split data. The study period covers 14 years, between 2008 and 2021. Market model event study methodology is being employed to analyze the average abnormal returns (AARs), cumulative abnormal returns (CARs) and cumulative AAR (CAARs) using an event window period consisting of 31 days ([Formula: see text]). The study is largely based on secondary information from the CMIE Prowess IQ Database and the official BSE website. The [Formula: see text]-test, mean and standard deviation were used to investigate the influence of stock split announcements on share prices and the performance of stock splits before and after the announcement. The study found that on ([Formula: see text]), ([Formula: see text]), ([Formula: see text]) and ([Formula: see text]) and on the day of the announcement ([Formula: see text]), the market reacted favorably with significant positive abnormal returns. On ([Formula: see text]) and ([Formula: see text]) days, however, there were significant negative abnormal returns. The null hypothesis is accepted as the CAR for the whole 31-day event window, which is 0.0221, with a [Formula: see text]-statistic of 1.692, which is insignificant.

scholarly journals Harga Saham Sebelum dan Sesudah Stock Split

2020 ◽  
Vol 3 (2) ◽  
pp. 390-395
Author(s):  
Junita Putri Rajana Harahap ◽  
Murni Dahlena Nasution
Keyword(s):  
Event Study ◽  
Capital Market ◽  
Stock Prices ◽  
Stock Price ◽  
Research Method ◽  
Price Difference ◽  
Significant Difference ◽  
Stock Split ◽  
Before And After ◽  
A Company

The stock split causes the stock price to be cheaper so that it will attract potential investors to buy the stock. This research was conducted to determine when it is time for a company to do a stock split, information available on the capital market can be used by investors for consideration before investors make a decision to invest in shares. The study aims to determine the changes that occur in stock prices before and after the stock split policy by the company. The research method used in this research is event study research with a quantitative approach. This study examines how significant the stock price difference is after a stock split policy. The sample used in this study were all companies that carried out the 2016-2018 stock split policy. The results of research on companies that become samples have shown that the average stock price before the announcement of the stock split policy has no significant difference with the average stock price after the announcement of the stock split policy Keywords : Stock Price, Stock Split

scholarly journals ANALISIS PERBEDAAN HARGA SAHAM, RETURN SAHAM, DAN ABNORMAL RETURN SEBELUM DAN SESUDAH STOCK SPLIT PADA PERUSAHAAN HIGH PROFILE DAN LOW PROFILE YANG TERDAFTAR DI BURSA EFEK INDONESIA

2021 ◽  
Vol 11 (1) ◽  
pp. 42
Author(s):  
Pita Rahmawati ◽  
Jawoto Nusantoro ◽  
Gustin Padwa Sari
Keyword(s):  
Stock Returns ◽  
Stock Prices ◽  
Abnormal Returns ◽  
T Test ◽  
Paired Sample ◽  
High Profile ◽  
Normality Test ◽  
Low Profile ◽  
Stock Split ◽  
Before And After

This research aims to determine whether there are differences in stock prices, stock returns and abnormal returns before and after a stock split in high profile and low profile companies. The research period used in this study was on 2016-2018. The research was analyzed in quantitative method by using a purposive sampling method. Based on the sampling criteria, 40 companies were selected as research samples. Kolmogorov Smirnov One Sample test was used for the normality test. After the normality test was carried out, the data was processed using the two paired-sample difference test. The t-test (paired sample t-test) was used if data were normally distributed but if it was not normally distributed the Wilcoxon Signed Rank test would be used. Hypothesis testing results showed that (1) there are differences in stock prices whether before and after a stock split in high profile companies (2) there are differences in stock prices whether before and after the stock split in low profile companies (3) there are differences in stock returns whether before and after a stock split in the company high profile (4) there is no difference in stock returns whether before and after the stock split in low profile companies (5) there is no difference in abnormal returns whether before and after the stock split in high profile companies (6) there is no difference in abnormal returns whether before and after the stock split in low profile companies (7) there are differences in stock prices after a stock split in high profile companies and low profile (8) there is no difference in stock returns whether before and after the stock split in high profile and low profile companies (9) there is no difference in abnormal stock returns whether before and after a stock split at high profile and low profile companies.

The effect of the imposition of a public reprimand on the stock price of companies in Malaysia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Emie Famieza Zainudin ◽  
Hafiza Aishah Hashim ◽  
Shahnaz Ismail
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Design Methodology ◽  
Negative Impact ◽  
Abnormal Returns ◽  
Investment Decisions ◽  
Market Model ◽  
Market Reactions ◽  
Content Type ◽  
A Company

Purpose This paper aims to examine the effect of the imposition of public reprimands on the underlying stock prices of companies in Malaysia. Design/methodology/approach Data on 148 companies that received public reprimands during the period from 2007 to 2013 were collected from the Bursa Malaysia website to analyse the market reactions to the imposition of public reprimands. Findings Based on a market model of abnormal returns, the empirical result showed that the imposition of a public reprimand had a negative impact on a company’s stock price. Moreover, when a market model of average abnormal returns (AAR) was used, the result indicated that companies that had received a public reprimand had a negative AAR value. Research limitations/implications The findings from this study have implications for shareholders in making their investment decisions because they can switch their investments to other companies and markets after a company in which they are interested or have made an investment has received a public reprimand. Originality/value There is limited research on the imposition of public reprimands and the effect that it has on companies in developing countries. Hence, this study contributes to research in this area by providing evidence on the effect of public reprimand on stock price reactions in the context of a developing country, namely, Malaysia.

Reverse Stock Splits in the Biotechnology Industry: An Effectuation Approach

2015 ◽  
Vol 21 (1) ◽  
Author(s):  
Wei Wu ◽  
Robert Couch ◽  
Yulianto Suharto ◽  
Mark J. Ahn
Keyword(s):  
Abnormal Returns ◽  
Biotechnology Industry ◽  
Stock Splits ◽  
Firm Age ◽  
Split Ratio ◽  
Ratio Size ◽  
Reverse Stock Splits ◽  
Biotech Industry ◽  
Reverse Stock Split

Using an effectuation theory lens, we study reverse stock splits in the biotech industry where significant uncertainty makes specific scenarios of success difficult to predict. We conjecture and find that, in contrast to other environments where there is less uncertainty, reverse stock splits in the biotech industry are followed by positive abnormal returns over the subsequent 1- to 12-months. Also consistent with our effectuation-based predictions, we find that these returns are positively related to the reverse split ratio, size, cash holding, and long-term debt, and negatively related to the market-to-book ratio and firm age. We also find that liquidity increases after a reverse stock split. These results suggest that the concept of effectuation theory is better suited to analyzing reverse stock splits in the biotech industry. 

The influence of title sponsorships in sports events on stock price returns

2015 ◽  
Vol 16 (2) ◽  
pp. 37-56 ◽  
Author(s):  
Masaki Kudo ◽  
Yong Jae Ko ◽  
Matthew Walker ◽  
Daniel P Connaughton
Keyword(s):  
Stock Returns ◽  
Event Study ◽  
Stock Prices ◽  
Stock Price ◽  
Abnormal Returns ◽  
Study Analysis ◽  
Sports Events ◽  
Price Increases ◽  
Event Date ◽  
The Impact

The purpose of this study was to examine stock price abnormal returns following title sponsorship announcement and event date of NASCAR, the PGA Tour, and the LPGA Tour. For this purpose, the authors used event study analysis where the analysis measures the impact that a specific event has on stock prices by comparing actual stock returns to estimated returns (Spais & Filis, 2008). An event study analysis demonstrated that title sponsors for the LPGA Tour and NASCAR garnered significant stock price increases on both the announcement date and the event date. The moderator tests suggested that high image congruence and high-technology related sponsorships assumed a key role in stock price increases.

scholarly journals Earnings management and long-term performance: evidence from reverse stock splits

2009 ◽  
Vol 7 (2) ◽  
pp. 420-439
Author(s):  
Michael Gombola ◽  
Amy Yueh-Fang Ho ◽  
Yi-Kai Chen
Keyword(s):  
Earnings Management ◽  
Balance Sheet ◽  
Abnormal Returns ◽  
Stock Splits ◽  
Reverse Stock Splits ◽  
Managerial Optimism ◽  
Reverse Stock Split ◽  
Term Performance

This study investigates earnings management and long-term stock performance surrounding reverse stock splits. It is designed to provide evidence on the role of managerial pessimism and discretionary current accruals. Discretionary current accruals are used to measure earnings management. These discretionary current accruals are measured in our study using the balance sheet approach as well as the cash flow statement approach. We find consistent evidence of negative discretionary current accruals prior to reverse stock splits. Such negative discretionary accruals are consistent with managerial pessimism prior to a reverse stock split. Such pessimism is warranted by the observed negative market reaction to a reverse split announcement and the negative abnormal returns observed after reverse splits. Negative discretionary current accruals are also consistent with smoothing of earnings during difficult and challenging periods for the firm. Our study might provide an alternative to the opportunism explanation. It also provides additional evidence buttressing the role of managerial optimism and pessimism in explaining earnings management.

scholarly journals The Relationship between Technology Life Cycle and Korean Stock Market Performance

2018 ◽  
Vol 6 (4) ◽  
pp. 88
Author(s):  
BokHyun Lee
Keyword(s):  
Life Cycle ◽  
Augmented Reality ◽  
Stock Returns ◽  
Stock Price ◽  
Abnormal Returns ◽  
Cumulative Abnormal Returns ◽  
Stock Market Performance ◽  
Technology Life Cycle ◽  
The Relationship ◽  
A Company

Through the three industrial revolutions, technology has enabled rapid changes in society. In a capitalist society, capital is invested where there is utility, for example, economic benefit. We intend to determine that the stock price of a company that uses a particular technology will change with the life cycle of the technology in question. Specifically, we filtered companies that mainly deal with augmented reality and are listed in Korea’s KOSDAQ market. We grouped these companies based on detailed technologies that constitute augmented reality. We used the event study method to calculate the stock returns against a benchmark. As a result, in the “Peak of Inflated Expectations” stage, the portfolios of all companies using augmented reality generally show higher returns than the benchmark. However, it is difficult to ascertain whether a return generated based on one of the detailed technologies that make up augmented reality is higher or lower than that of the benchmark. During the “Trough of Disillusionment” phase, there was neither a consistent trend of cumulative abnormal returns (CAR) nor buy-and-hold abnormal returns (BHAR). However, during this stage, there was a positive correlation of average BHAR and average abnormal returns between the entire sample’s portfolio and each detailed technology firm’s portfolio.

Sign in / Sign up

Export Citation Format

Share Document