Date of Award
5-2021
Degree Type
Creative Project
Degree Name
Master of Science (MS)
Department
Economics and Finance
Committee Chair(s)
Tyler Brough (Committee Chair)
Committee
Tyler Brough
Committee
Todd Griffith
Committee
Jared DeLisle
Abstract
I examine whether short selling increases around reverse stock splits using 2019 daily short selling data instead of bimonthly short interest data required by FINRA. In my difference-in-difference analysis, I find that average short selling increases significantly for firms that reverse split their stock, relative to matched control firms that do not, around the split dates. I also find that firms that reverse split their stock experience negative cumulative abnormal returns in the 20-day period after the reverse stock splits, particularly for those firms that are heavily shorted. These results are in agreeance with existent literature and suggest that short sellers are informed and correctly predict future negative abnormal returns. The results also suggest that short sellers put downward pressure on stock prices after reverse splits.
Recommended Citation
Voges, Ryan, "Short Selling Around Reverse Stock Splits" (2021). All Graduate Plan B and other Reports, Spring 1920 to Spring 2023. 1533.
https://digitalcommons.usu.edu/gradreports/1533
Included in
Corporate Finance Commons, Finance and Financial Management Commons, Portfolio and Security Analysis Commons
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