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Market Sentiment and Stock Splits

Jitka Hilliard & Haoran Zhang

Applied Finance Letters2025https://doi.org/10.24135/afl.v14i.830article
ABDC B
Weight
0.50

Abstract

This study examines the impact of stock split events on abnormal returns, identifying significant effects both short-term and long-term. We find that market sentiment plays a crucial role, with abnormal returns being more pronounced during high sentiment periods. Our research highlights two key contributions: it emphasizes the importance of market sentiment in stock price reactions to corporate events and supports the signaling hypothesis, suggesting that management uses stock splits to convey positive information, especially when sentiment is high. These findings are valuable for investors and corporate managers considering the implications of stock splits.

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https://doi.org/https://doi.org/10.24135/afl.v14i.830

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@article{jitka2025,
  title        = {{Market Sentiment and Stock Splits}},
  author       = {Jitka Hilliard & Haoran Zhang},
  journal      = {Applied Finance Letters},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.24135/afl.v14i.830},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.