Date of Award
Master of Science (MS)
Economics and Finance
Tyler Brough (Committee Chair)
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.
Voges, Ryan, "Short Selling Around Reverse Stock Splits" (2021). All Graduate Plan B and other Reports. 1533.
Corporate Finance Commons, Finance and Financial Management Commons, Portfolio and Security Analysis Commons
Copyright for this work is retained by the student. If you have any questions regarding the inclusion of this work in the Digital Commons, please email us at .