Exact(5)
So how should the individual investor react to a stock split announcement?
While stock prices tend to rise in the days after the split announcement, much of the excess return occurs later.
Researchers think that a lower price per share and the buzz that surrounds a split announcement end up increasing trading volume by drawing in unfamiliar buyers.
The study found that stock prices outperformed by an average of 3.4% in the five days after the split announcement, then another 4.5% over the next 51 weeks of trading.
After the split announcement, TMZ reported that sources close to the couple said the two will continue working on their YouTube Red series, called "Step Up: High Water," together. .
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Based on the research results, even investors who purchased five days after split announcements would have beaten the market.
Their aim was to test market efficiency by studying the impact split announcements have on stock prices through their implied increase in dividends.
The shares closed at 413 Swiss francs, or about $248, on the Zurich exchange, after the stock-split announcement.
The relationship between stock-split announcement and price gains appears to continue today.
Pre-split announcement on Saturday night, Hemsworth headed out to Las Vegas to see Floyd Mayweather Jr. take on Canelo Alvarez, and afterward the "Hunger Games" star was spotted getting very close to a beautiful blonde at XS nightclub.
Regardless of the reason for the gains, investors should realize that stock-split announcements often precede strong stock-price movements.
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