RE:RE:RE:RE:RE:RE:Reverse splits.....I was always against reverse splits. After reading this Article. I'm now starting to wonder why they're even thinking about doing the consolidation. Especially 10 to 1, forget 20 to 1.
clubhouse19 wrote: This refers US stocks but with canada could the result be worse ??
Short Selling around Reverse Stock Splits By Ryan Vogesa 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. Keywords: Short Selling; Cumulative Abnormal Returns; Reverse Stock Sp