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Central European Management Journal

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Year 2020 
Volume 28 
Issue 1

The “Magic Action” of Stock Splits: Evidence from the Warsaw Stock Exchange 2003–2017

Błażej Podgórski
Kozminski University

Krzysztof Pasierbek
Kozminski University

2020 28 (1) Central European Management Journal

DOI 0.7206/cemj.2658-0845.16

References

  1. Baker, H.K. and Powell, G.E. (1994). Further evidence on managerial motives fork stock splits. Quarterly Journal of Business and Economics, 32(3), 20–31. [Google Scholar]
  2. Brennan, M.J. and Hughes, P.J. (1991). Stock prices and the supply of information. The Journal of Finance, 46, 1665–1691, https://doi.org/10.1111/j.1540-6261.1991.tb04639.x. [Google Scholar]
  3. Buczek, S.B. (2005). Efektywność informacyjna rynków akcji: teoria a rzeczywistość. Warszawa: Szkoła Główna Handlowa. [Google Scholar]
  4. D’Mello, R., Tawatnuntachai, O. and Yaman, D. (2003). Why do firms issue equity after splitting stocks? Financial Review, 38, 323–350, https://doi.org/10.1111/1540-6288.00049. [Google Scholar]
  5. Desai, Anand S., Mahendrarajah Nimalendran and Subu Venkataraman (1998). Changes in Trading Activity Following Stock Splits and Their Effect on Volatility and the Adverse Information Component of the Bid-Ask Spread. Journal of Financial Research, 21, 159–183, https://doi.org/10.1111/j.1475-6803.1998.tb00678.x. [Google Scholar]
  6. Fama, E.F. (1965). The behavior of stock-market prices. The Journal of Business, 38(1), 34–105, https://doi.org/10.1086/294743. [Google Scholar]
  7. Fama, E.F. (1969). The adjustment of stock prices to new information. International Economic Review, 10(1), 1–21, https://doi.org/10.2307/2525569. [Google Scholar]
  8. Fernando, Ch.S., Krishnamurthy, S. and Spindt, P.A. (1999). Is share price related to marketability? Evidence from Mutual Fund Share Splits. Financial Management, 28(3), 54–67, https://doi.org/10.2307/3666183. [Google Scholar]
  9. FTSE Russel 2017. Annual Country Classification Review (2017). https://research.ftserussell.com/products/downloads/FTSE-Country-Classification-Update-2017.pdf (02.02.2020). [Google Scholar]
  10. Grinblatt, M., Masulis, R. and Titman, Sh. (1984). The valuation effects of stock splits and stock dividends. Journal of Financial Economics, 13(4), 461–490, https://doi.org/10.1016/0304-405X(84)90011-4. [Google Scholar]
  11. Grudziński, M. (2006). Magiczny zabieg: SPLIT. CEO, 6. [Google Scholar]
  12. Gurgul, H. (2006). Analiza zdarzeń na rynkach akcji. Kraków: Oficyna Ekonomiczna. [Google Scholar]
  13. Guo, S., Liu, M.H. and Song, W. (2008). Stock splits as a manipulation tool: Evidence from mergers and acquisitions. Financial Management, 37, 695–712, https://doi.org/10.1111/j.1755-053X.2008.00031.x. [Google Scholar]
  14. Honghui, Ch., Nguyen, H.H. and Singal, V. (2011). The information content of stock splits. Journal of Banking & Finance, 2454–2467, https://doi.org/10.1016/j.jbankfin.2011.02.005. [Google Scholar]
  15. Ikenberry, D.L., Rankine, G. and Stice, E.K. (1996). What do stock splits really signal? The Journal of Financial and Quantitative Analysis, 31(3), 357–375, https://doi.org/10.2307/2331396. [Google Scholar]
  16. May H., Chi-Chur Chao, Malone, Ch. and Young, M. (2017). Real determinants of stock split announcements. International Review of Economics and Finance, 51, 574–598, https://doi.org/10.1016/j.iref.2017.07.027. [Google Scholar]
  17. Pilotte, E. and Manuci, T. (1996). The market’s response to recurring events. The case of stock splits. Journal of Financial Economics, 41, 111–127, https://doi.org/10.1016/0304-405X(95)00859-D. [Google Scholar]
  18. Soosung Hwang, Aneel Keswani and Shackleton, M.B. (2008). Surprise vs anticipated information announcements: Are prices affected differently? An investigation in the context of stock splits. Journal of Banking & Finance, 32, 643–665, https://doi.org/10.1016/j.jbankfin.2007.04.028. [Google Scholar]
  19. Pasierbek, K. (2017). Split on the Warsaw Stock Exchange. Zeszyty Programu Top 15, 43–53. [Google Scholar]
  20. Podgórski, B. (2018a). Impact of the January Effect on Return Rates in the Markets of the 2004 EU Enlargement. Journal of Management and Business Administration. Central Europe, 26, 27–48, https://doi.org/10.7206/jmba.ce.2450-7814.218. [Google Scholar]
  21. Podgórski, B. (2018b). Effect Momentum Evidence from Advance Emerging Markets. Zeszyty Naukowe Uniwersytetu Szczecińskiego. Finanse. Rynki finansowe. Ubezpieczenia, 2(92), 325–334, https://doi.org/10.18276/frfu.2018.92-28. [Google Scholar]
  22. Robinson, D. (2007). The information content of reverse stock splits. Advances in Accounting, 23, 179–205, https://doi.org/10.1016/S0882-6110(07)23007-X. [Google Scholar]
  23. Schultz, P. (2000). Regulatory and legal pressures and the costs of Nasdaq Trading. The Review of Financial Studies, 13(4), 917–957, https://doi.org/10.1093/rfs/13.4.917. [Google Scholar]
  24. Słoński, T. and Rudnicki, J. (2011). Wpływ podziału akcji na stopę zwrotu z inwestycji w akcje. Zeszyty Naukowe Uniwersytetu Szczecińskiego. Finanse. Rynki finansowe. Ubezpieczenia, 37, 323–334. [Google Scholar]
  25. Wnuczak, P. (2016). Tempo wzrostu gospodarczego jako determinant odchylenia cen akcji od ich wartości fundamentalnych. Zeszyty Naukowe Uniwersytetu Szczecińskiego. Finanse. Rynki finansowe. Ubezpieczenia, 79,149–157, https://doi.org/10.18276/frfu.2016.79-11. [Google Scholar]
  26. Baker, H.K. and Powell, G.E. (1994). Further evidence on managerial motives fork stock splits. Quarterly Journal of Business and Economics, 32(3), 20–31. [Google Scholar]
  27. Brennan, M.J. and Hughes, P.J. (1991). Stock prices and the supply of information. The Journal of Finance, 46, 1665–1691, https://doi.org/10.1111/j.1540-6261.1991.tb04639.x. [Google Scholar]
  28. Buczek, S.B. (2005). Efektywność informacyjna rynków akcji: teoria a rzeczywistość. Warszawa: Szkoła Główna Handlowa. [Google Scholar]
  29. D’Mello, R., Tawatnuntachai, O. and Yaman, D. (2003). Why do firms issue equity after splitting stocks? Financial Review, 38, 323–350, https://doi.org/10.1111/1540-6288.00049. [Google Scholar]
  30. Desai, Anand S., Mahendrarajah Nimalendran and Subu Venkataraman (1998). Changes in Trading Activity Following Stock Splits and Their Effect on Volatility and the Adverse Information Component of the Bid-Ask Spread. Journal of Financial Research, 21, 159–183, https://doi.org/10.1111/j.1475-6803.1998.tb00678.x. [Google Scholar]
  31. Fama, E.F. (1965). The behavior of stock-market prices. The Journal of Business, 38(1), 34–105, https://doi.org/10.1086/294743. [Google Scholar]
  32. Fama, E.F. (1969). The adjustment of stock prices to new information. International Economic Review, 10(1), 1–21, https://doi.org/10.2307/2525569. [Google Scholar]
  33. Fernando, Ch.S., Krishnamurthy, S. and Spindt, P.A. (1999). Is share price related to marketability? Evidence from Mutual Fund Share Splits. Financial Management, 28(3), 54–67, https://doi.org/10.2307/3666183. [Google Scholar]
  34. FTSE Russel 2017. Annual Country Classification Review (2017). https://research.ftserussell.com/products/downloads/FTSE-Country-Classification-Update-2017.pdf (02.02.2020). [Google Scholar]
  35. Grinblatt, M., Masulis, R. and Titman, Sh. (1984). The valuation effects of stock splits and stock dividends. Journal of Financial Economics, 13(4), 461–490, https://doi.org/10.1016/0304-405X(84)90011-4. [Google Scholar]
  36. Grudziński, M. (2006). Magiczny zabieg: SPLIT. CEO, 6. [Google Scholar]
  37. Gurgul, H. (2006). Analiza zdarzeń na rynkach akcji. Kraków: Oficyna Ekonomiczna. [Google Scholar]
  38. Guo, S., Liu, M.H. and Song, W. (2008). Stock splits as a manipulation tool: Evidence from mergers and acquisitions. Financial Management, 37, 695–712, https://doi.org/10.1111/j.1755-053X.2008.00031.x. [Google Scholar]
  39. Honghui, Ch., Nguyen, H.H. and Singal, V. (2011). The information content of stock splits. Journal of Banking & Finance, 2454–2467, https://doi.org/10.1016/j.jbankfin.2011.02.005. [Google Scholar]
  40. Ikenberry, D.L., Rankine, G. and Stice, E.K. (1996). What do stock splits really signal? The Journal of Financial and Quantitative Analysis, 31(3), 357–375, https://doi.org/10.2307/2331396. [Google Scholar]
  41. May H., Chi-Chur Chao, Malone, Ch. and Young, M. (2017). Real determinants of stock split announcements. International Review of Economics and Finance, 51, 574–598, https://doi.org/10.1016/j.iref.2017.07.027. [Google Scholar]
  42. Pilotte, E. and Manuci, T. (1996). The market’s response to recurring events. The case of stock splits. Journal of Financial Economics, 41, 111–127, https://doi.org/10.1016/0304-405X(95)00859-D. [Google Scholar]
  43. Soosung Hwang, Aneel Keswani and Shackleton, M.B. (2008). Surprise vs anticipated information announcements: Are prices affected differently? An investigation in the context of stock splits. Journal of Banking & Finance, 32, 643–665, https://doi.org/10.1016/j.jbankfin.2007.04.028. [Google Scholar]
  44. Pasierbek, K. (2017). Split on the Warsaw Stock Exchange. Zeszyty Programu Top 15, 43–53. [Google Scholar]
  45. Podgórski, B. (2018a). Impact of the January Effect on Return Rates in the Markets of the 2004 EU Enlargement. Journal of Management and Business Administration. Central Europe, 26, 27–48, https://doi.org/10.7206/jmba.ce.2450-7814.218. [Google Scholar]
  46. Podgórski, B. (2018b). Effect Momentum Evidence from Advance Emerging Markets. Zeszyty Naukowe Uniwersytetu Szczecińskiego. Finanse. Rynki finansowe. Ubezpieczenia, 2(92), 325–334, https://doi.org/10.18276/frfu.2018.92-28. [Google Scholar]
  47. Robinson, D. (2007). The information content of reverse stock splits. Advances in Accounting, 23, 179–205, https://doi.org/10.1016/S0882-6110(07)23007-X. [Google Scholar]
  48. Schultz, P. (2000). Regulatory and legal pressures and the costs of Nasdaq Trading. The Review of Financial Studies, 13(4), 917–957, https://doi.org/10.1093/rfs/13.4.917. [Google Scholar]
  49. Słoński, T. and Rudnicki, J. (2011). Wpływ podziału akcji na stopę zwrotu z inwestycji w akcje. Zeszyty Naukowe Uniwersytetu Szczecińskiego. Finanse. Rynki finansowe. Ubezpieczenia, 37, 323–334. [Google Scholar]
  50. Wnuczak, P. (2016). Tempo wzrostu gospodarczego jako determinant odchylenia cen akcji od ich wartości fundamentalnych. Zeszyty Naukowe Uniwersytetu Szczecińskiego. Finanse. Rynki finansowe. Ubezpieczenia, 79,149–157, https://doi.org/10.18276/frfu.2016.79-11. [Google Scholar]
  51. Baker, H.K. and Powell, G.E. (1994). Further evidence on managerial motives fork stock splits. Quarterly Journal of Business and Economics, 32(3), 20–31. [Google Scholar]
  52. Brennan, M.J. and Hughes, P.J. (1991). Stock prices and the supply of information. The Journal of Finance, 46, 1665–1691, https://doi.org/10.1111/j.1540-6261.1991.tb04639.x. [Google Scholar]
  53. Buczek, S.B. (2005). Efektywność informacyjna rynków akcji: teoria a rzeczywistość. Warszawa: Szkoła Główna Handlowa. [Google Scholar]
  54. D’Mello, R., Tawatnuntachai, O. and Yaman, D. (2003). Why do firms issue equity after splitting stocks? Financial Review, 38, 323–350, https://doi.org/10.1111/1540-6288.00049. [Google Scholar]
  55. Desai, Anand S., Mahendrarajah Nimalendran and Subu Venkataraman (1998). Changes in Trading Activity Following Stock Splits and Their Effect on Volatility and the Adverse Information Component of the Bid-Ask Spread. Journal of Financial Research, 21, 159–183, https://doi.org/10.1111/j.1475-6803.1998.tb00678.x. [Google Scholar]
  56. Fama, E.F. (1965). The behavior of stock-market prices. The Journal of Business, 38(1), 34–105, https://doi.org/10.1086/294743. [Google Scholar]
  57. Fama, E.F. (1969). The adjustment of stock prices to new information. International Economic Review, 10(1), 1–21, https://doi.org/10.2307/2525569. [Google Scholar]
  58. Fernando, Ch.S., Krishnamurthy, S. and Spindt, P.A. (1999). Is share price related to marketability? Evidence from Mutual Fund Share Splits. Financial Management, 28(3), 54–67, https://doi.org/10.2307/3666183. [Google Scholar]
  59. FTSE Russel 2017. Annual Country Classification Review (2017). https://research.ftserussell.com/products/downloads/FTSE-Country-Classification-Update-2017.pdf (02.02.2020). [Google Scholar]
  60. Grinblatt, M., Masulis, R. and Titman, Sh. (1984). The valuation effects of stock splits and stock dividends. Journal of Financial Economics, 13(4), 461–490, https://doi.org/10.1016/0304-405X(84)90011-4. [Google Scholar]
  61. Grudziński, M. (2006). Magiczny zabieg: SPLIT. CEO, 6. [Google Scholar]
  62. Gurgul, H. (2006). Analiza zdarzeń na rynkach akcji. Kraków: Oficyna Ekonomiczna. [Google Scholar]
  63. Guo, S., Liu, M.H. and Song, W. (2008). Stock splits as a manipulation tool: Evidence from mergers and acquisitions. Financial Management, 37, 695–712, https://doi.org/10.1111/j.1755-053X.2008.00031.x. [Google Scholar]
  64. Honghui, Ch., Nguyen, H.H. and Singal, V. (2011). The information content of stock splits. Journal of Banking & Finance, 2454–2467, https://doi.org/10.1016/j.jbankfin.2011.02.005. [Google Scholar]
  65. Ikenberry, D.L., Rankine, G. and Stice, E.K. (1996). What do stock splits really signal? The Journal of Financial and Quantitative Analysis, 31(3), 357–375, https://doi.org/10.2307/2331396. [Google Scholar]
  66. May H., Chi-Chur Chao, Malone, Ch. and Young, M. (2017). Real determinants of stock split announcements. International Review of Economics and Finance, 51, 574–598, https://doi.org/10.1016/j.iref.2017.07.027. [Google Scholar]
  67. Pilotte, E. and Manuci, T. (1996). The market’s response to recurring events. The case of stock splits. Journal of Financial Economics, 41, 111–127, https://doi.org/10.1016/0304-405X(95)00859-D. [Google Scholar]
  68. Soosung Hwang, Aneel Keswani and Shackleton, M.B. (2008). Surprise vs anticipated information announcements: Are prices affected differently? An investigation in the context of stock splits. Journal of Banking & Finance, 32, 643–665, https://doi.org/10.1016/j.jbankfin.2007.04.028. [Google Scholar]
  69. Pasierbek, K. (2017). Split on the Warsaw Stock Exchange. Zeszyty Programu Top 15, 43–53. [Google Scholar]
  70. Podgórski, B. (2018a). Impact of the January Effect on Return Rates in the Markets of the 2004 EU Enlargement. Journal of Management and Business Administration. Central Europe, 26, 27–48, https://doi.org/10.7206/jmba.ce.2450-7814.218. [Google Scholar]
  71. Podgórski, B. (2018b). Effect Momentum Evidence from Advance Emerging Markets. Zeszyty Naukowe Uniwersytetu Szczecińskiego. Finanse. Rynki finansowe. Ubezpieczenia, 2(92), 325–334, https://doi.org/10.18276/frfu.2018.92-28. [Google Scholar]
  72. Robinson, D. (2007). The information content of reverse stock splits. Advances in Accounting, 23, 179–205, https://doi.org/10.1016/S0882-6110(07)23007-X. [Google Scholar]
  73. Schultz, P. (2000). Regulatory and legal pressures and the costs of Nasdaq Trading. The Review of Financial Studies, 13(4), 917–957, https://doi.org/10.1093/rfs/13.4.917. [Google Scholar]
  74. Słoński, T. and Rudnicki, J. (2011). Wpływ podziału akcji na stopę zwrotu z inwestycji w akcje. Zeszyty Naukowe Uniwersytetu Szczecińskiego. Finanse. Rynki finansowe. Ubezpieczenia, 37, 323–334. [Google Scholar]
  75. Wnuczak, P. (2016). Tempo wzrostu gospodarczego jako determinant odchylenia cen akcji od ich wartości fundamentalnych. Zeszyty Naukowe Uniwersytetu Szczecińskiego. Finanse. Rynki finansowe. Ubezpieczenia, 79,149–157, https://doi.org/10.18276/frfu.2016.79-11. [Google Scholar]

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APA style

Podgórski, B. , & Pasierbek, K.. (2020). The “Magic Action” of Stock Splits: Evidence from the Warsaw Stock Exchange 2003–2017. Central European Management Journal, 28(1), 66-80. https://doi.org/0.7206/cemj.2658-0845.16 (Original work published 2020)

MLA style

Podgórski, B. , and K. Pasierbek. “The “Magic Action” Of Stock Splits: Evidence From The Warsaw Stock Exchange 2003–2017”. 2020. Central European Management Journal, vol. 28, no. 1, 2020, pp. 66-80.

Chicago style

Podgórski, Błażej , and Krzysztof Pasierbek. “The “Magic Action” Of Stock Splits: Evidence From The Warsaw Stock Exchange 2003–2017”. Central European Management Journal, Central European Management Journal, 28, no. 1 (2020): 66-80. doi:0.7206/cemj.2658-0845.16.