Stock splits are supposed to be financial cosmetics. However, this study shows that such corporate events have impact on ownership structure. This study exploits unique data from Swedish Central Security Registration regarding ownership and analyzes the ownership structures in stock splitting firms.
Our data consists of exclusive semi-annually reported ownership structures of companies listed on Stockholm Stock Exchange. We categorize stock owners as domestic institutional investors, foreign investors and domestic individual investors. The information on ultimate ownership composition in listed companies is rare and more or less exquisite for Sweden.
Our results confirm positive abnormal returns surrounding the announcement of stock splits and stock dividends. Moreover, we find evidence on changes in ownership structure as well as number of shareholders. The results show evidence on decreasing ownership concentration due to the stock split, which implies a more dispersed ownership structure.
Source: Gotland University
Author: Abrahamson, Martin | Kalström, Robert