The effect of stock splits on the ownership structure of firms

Mukherji, Sandip; Kim, Yong H.; Walker, Michael C.

doi:10.1016/s0929-1199(96)00014-4

Cited by 80 publications

(57 citation statements)

References 20 publications

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“…Our results are consistent with their findings on the impact of anti-takeover measures on the M&A characteristics. 6 Our results corroborate earlier findings of Mukherji, Kim, and Walker (1997) for stock splits and Bodnaruk and Östberg (2011) for repurchases.…”

supporting

confidence: 88%

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Passive Shareholders as a Takeover Defense

et al. 2011

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This paper evaluates the effect of shareholder passiveness on the market for corporate control.We find that firms with more passive shareholders (lower ownership per non-institutional shareholder) are less likely to be takeover targets, less likely to be acquired and command higher premiums. Using the adoption of anti-takeover law in Delaware as an exogenous shock to antitakeover protection, we show that the passiveness of shareholder base decreases as the takeover threat subsides. Our findings support the idea that a passive shareholder base is a substitute for other takeover defenses.JEL Codes: G34, G32

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supporting

confidence: 88%

“…These findings mirror those of Mukherji, Kim, and Walker (1997) In terms of economic magnitudes, in specification (3) a typical firm undertaking a stock split increases its shareholder passiveness by 0.06, which corresponds to 97.54%…”

Section: Managing Passivenesssupporting

confidence: 70%

Passive Shareholders as a Takeover Defense

et al. 2011

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“…Given this and that institutional investors are typically considered more informed investors, we analyze whether institutional holdings change around split announcements. Mukherji, Kim, and Walker (1997) find that splits do not affect the proportion of equity held by institutions. Dennis and Strickland (2003) and Chen, Nguyen, and Singal (2011) report a small Table 12 reports institutional holdings from 13F quarterly filings for the full sample of optionable splitting firms and in each of the four market capitalization groups.…”

Section: Table 11mentioning

confidence: 71%

Informed Trading around Stock Split Announcements: Evidence from the Option Market

Gharghori¹,

Maberly²,

Nguyen³

2017

J. Financ. Quant. Anal.

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Prior research shows that splitting firms earn positive abnormal returns and that they experience an increase in stock return volatility. By examining option-implied volatility, we assess option traders' perceptions on return and volatility changes arising from stock splits. We find that they do expect higher volatility following splits. There is only weak evidence, though, of option traders anticipating an abnormal increase in stock prices. We also show that our option measures can predict both stock volatility levels and changes after the announcement. However, there is little evidence that they can predict the returns of splitting firms.

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“…Empirically, a number of studies (e.g., Murray, 1985;Muscarella and Vetsuypens, 1996;Desai et al, 1998) find that trading activity increases after stock splits. Moreover, Mukherji et al (1997) find that abnormal split announcement returns are positively related to changes in the number of shareholders.…”

Section: Changes In Liquidity For Splitting and Matched Non-splittingmentioning

confidence: 90%