Stock (geology)

About: Stock (geology) is a research topic. Over the lifetime, 31009 publications have been published within this topic receiving 783542 citations.

All the News That's Fit to Reprint: Do Investors React to Stale Information?

Abstract: This article tests whether stock market investors appropriately distinguish between new and old information about firms. I define the staleness of a news story as its textual similarity to the previous ten stories about the same firm. I find that firms' stock returns respond less to stale news. Even so, a firm's return on the day of stale news negatively predicts its return in the following week. Individual investors trade more aggressively on news when news is stale. The subsequent return reversal is significantly larger in stocks with above-average individual investor trading activity. These results are consistent with the idea that individual investors overreact to stale information, leading to temporary movements in firms' stock prices. The Author 2011. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com., Oxford University Press.

The Effect of Voluntary Spin-off Announcements on Shareholder Wealth

Abstract: This paper presents estimates of the effect of a voluntary spin-off announcement on shareholder wealth. The results show that spin-off announcements have a positive influence on stock prices and that the relative increase in share price is greater for large spin-offs than for small ones.

Liquidity Changes Following Stock Splits

Abstract: THERE HAS BEEN CONSIDERABLE empirical research on the return behavior of common stocks in calendar intervals surrounding stock splits. A partial list includes work by Barker [2]; Johnson [25]; Hausman, West and Largay [21]; Fama, Fisher, Jensen, and Roll [16]; and Bar-Yosef and Brown [1]. However, little or no evidence has been collected about stockholder trading behavior in split-up securities. This is surprising because it is often alleged that stocks split because they provide "better" markets for trading. This study presents evidence about the liquidity effects of stock splits. There are numerous rationales for stock splits, and many are related to the liquidity of trading. For example, one often hears on Wall Street that there is an "optimal" price range for securities. Stocks which trade in this range are presumed to have lower brokerage fees as a percent of value traded and therefore appear to be more liquid. This "optimal" range is considered to be a compromise between the desires of wealthy investors and institutions who will minimize brokerage costs if securities are high-priced, and the desires of small investors who will minimize odd-lot brokerage costs if securities are low-priced. Implicitly, there is a trade-off between diversification benefits and the lower transactions costs of round-lot trading.' One difficulty with the argument is that small investors can economize on odd-lots by forming investment clubs or by buying no-load mutual funds. A second difficulty is that odd-lot trades are simply not a significant fraction of trading activity. Finally, if the price of a security becomes "too high," the market obliges by making ten shares a round lot. Another explanation for splits, also heard on Wall Street, is that they create "wider" markets. Following a split, the number of shareholders may increase simply because an individual, who holds one round lot and who is likely to sell it to one buyer before a two-for-one split, may sell two round lots to two people after the split.2 If the number of shareholders increases after the split, then trading volume increases. Demsetz [11] shows that higher volume results in lower