Stock splits and reverse splits in the Brazilian capital market

Daniel Werner Lima Souza de Almeida, Tabajara Pimenta Júnior, Luiz Gaio and Fabiano Guasti Lima

Journal of Economics, Finance and Administrative Science, 2024, vol. 29, issue 58, 277-293

Abstract: Purpose - This study aims to evaluate the presence of abnormal returns due to stock splits or reverse stock splits in the Brazilian capital market context. Design/methodology/approach - The event study technique was used on data from 518 events that occurred in a 30-year period (1987–2016), comprising 167 stock splits and 351 reverse stock splits. Findings - The results revealed the occurrence of abnormal returns around the time the shares began trading stock splits or reverse stock splits at a statistical significance level of 5%. The main conclusion is that stock split and reverse stock split operations represent opportunities for extraordinary gains and may serve as a reference for investment strategies in the Brazilian stock market. Originality/value - This study innovates by including reverse stock splits, as the existing literature focuses on stock splits, and by testing two distinct “zero” dates that of the ordinary general meeting that approved the share alteration and the “ex” date of the alteration, when the shares were effectively traded, reverse split or split.

Keywords: Stock split; Reverse stock split; Market efficiency; Investment strategies; G14; G12; G32 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jefasp:jefas-08-2021-0168

DOI: 10.1108/JEFAS-08-2021-0168

Access Statistics for this article

Journal of Economics, Finance and Administrative Science is currently edited by Nestor U. Salcedo

More articles in Journal of Economics, Finance and Administrative Science from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().