Negative impact on stock prices

Oct 13, 2025 by windailys.com 84 views

Analysis of the Impact of Stock Split on Stock Prices and Trade Volumes in Companies Listed on the IDX (Manufacturing, Mining, Financial, and Agricultural Sectors from 2010-2013)

Introduction

The Indonesia Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia, with a wide range of companies listed across various sectors, including manufacturing, mining, financial, and agricultural. One of the key events that can affect the stock prices and trading volumes of these companies is the stock split. A stock split is a corporate action where a company divides its existing shares into a larger number of shares, usually to make the stock more affordable and attractive to investors. However, the impact of stock split on stock prices and trading volumes is a topic of ongoing debate among investors and researchers.

Background

This study aims to analyze the impact of stock split on changes in stock prices and trading volumes in companies listed on the IDX during the period 2010 to 2013. The study uses an event design using secondary data from 30 companies chosen through purposive sampling. The researchers used the paired sample t-test to test the hypothesis, and the normality test was carried out using the Kolmogorov-Smirnov Test. Data analysis was carried out using SPSS software version 19.0.

Methodology

The study used a quantitative approach, collecting secondary data from 30 companies listed on the IDX. The data was collected from various sources, including company reports, financial statements, and stock exchange data. The researchers used the paired sample t-test to test the hypothesis, which states that stock split has a significant effect on changes in stock prices and trading volumes.

Results

The results of the study showed that stock split had a significant effect on changes in stock prices and trading volumes. However, this effect was negative, indicated by a decrease in the average change in stock prices and the average trading volume after stock split. This finding is contrary to the general theory of stock split, which is believed to increase liquidity and stock appeal for investors.

Discussion

The negative impact of stock split on stock prices and trading volumes can be attributed to several factors, including:

Investor Perception: Investors may see stock split as a signal that the company is in poor condition, thus encouraging stock sales and causing price reduction.
Macro Factor: The period 2010-2013 was a global economic transition period, characterized by uncertainty and instability in the global economy and domestic economic conditions. This can affect market sentiment, including stocks that experience stock split.
Company Strategy: Stock Split is sometimes carried out by the company with the aim of increasing liquidity and attracting retail investors. However, if not accompanied by positive company performance, stock split can actually create negative perceptions and reduce stock prices.

Implications for Investors

The results of this study provide several implications for investors:

Be careful of stock split: Don't directly assume that stock split always has a positive impact on stock prices. Also, pay attention to company performance and macroeconomic conditions before deciding to invest.
Fundamental Analysis: Keep focusing on the company's fundamental analysis before deciding to buy or sell shares. Stock split is just one of the factors that need to be considered.

The Importance of Further Research

This study provides an overview of the impact of stock split on the stock market in Indonesia. However, there are some things that need to be further investigated, including:

Other Factors Role: It is necessary to do research that analyzes other factors that can affect the impact of stock split on stock prices, for example, company performance, economic conditions, and market sentiment.
Time period: This research only covers the 2010-2013 period. Further research is needed to analyze the impact of stock split in a longer period.

Conclusion

In conclusion, this study provides an analysis of the impact of stock split on stock prices and trading volumes in companies listed on the IDX during the period 2010 to 2013. The results show that stock split had a significant negative effect on stock prices and trading volumes. The implications of this study are that investors should be careful of stock split and focus on fundamental analysis before deciding to invest. Further research is needed to analyze the impact of stock split in a longer period and to investigate other factors that can affect the impact of stock split on stock prices.

References

[List of references used in the study]

Limitations of the Study

The study only covers the 2010-2013 period, which may not be representative of the current market conditions.
The study only analyzes the impact of stock split on stock prices and trading volumes, and does not consider other factors that can affect the impact of stock split.

Future Research Directions

Further research is needed to analyze the impact of stock split in a longer period.
Research is needed to investigate other factors that can affect the impact of stock split on stock prices, for example, company performance, economic conditions, and market sentiment.

Conclusion

Introduction

In our previous article, we analyzed the impact of stock split on stock prices and trading volumes in companies listed on the Indonesia Stock Exchange (IDX) during the period 2010 to 2013. The results showed that stock split had a significant negative effect on stock prices and trading volumes. In this Q&A article, we will answer some of the most frequently asked questions about the impact of stock split on stock prices and trading volumes.

Q: What is a stock split, and how does it affect stock prices?

A: A stock split is a corporate action where a company divides its existing shares into a larger number of shares, usually to make the stock more affordable and attractive to investors. However, the impact of stock split on stock prices is a topic of ongoing debate among investors and researchers. In our study, we found that stock split had a significant negative effect on stock prices.

Q: Why did the stock split have a negative impact on stock prices?

A: There are several reasons why the stock split had a negative impact on stock prices. One reason is that investors may see stock split as a signal that the company is in poor condition, thus encouraging stock sales and causing price reduction. Another reason is that the period 2010-2013 was a global economic transition period, characterized by uncertainty and instability in the global economy and domestic economic conditions. This can affect market sentiment, including stocks that experience stock split.

Q: What are the implications of this study for investors?

A: The implications of this study are that investors should be careful of stock split and focus on fundamental analysis before deciding to invest. Stock split is just one of the factors that need to be considered, and investors should not directly assume that stock split always has a positive impact on stock prices.

Q: What are some other factors that can affect the impact of stock split on stock prices?

A: There are several other factors that can affect the impact of stock split on stock prices, including company performance, economic conditions, and market sentiment. Further research is needed to investigate these factors and their impact on stock prices.

Q: Why is it important to consider the impact of stock split on stock prices?

A: It is essential to consider the impact of stock split on stock prices because it can affect the investment decisions of investors. If investors are not aware of the potential negative impact of stock split on stock prices, they may make uninformed investment decisions that can lead to financial losses.

Q: What are some potential risks associated with stock split?

A: Some potential risks associated with stock split include:

Negative impact on stock prices: Stock split can have a negative impact on stock prices, which can lead to financial losses for investors.
Uncertainty: Stock split can create uncertainty among investors, which can lead to market volatility and financial losses.
Lack of transparency: Stock split can be a complex process, and investors may not be aware of the potential risks and benefits associated with it.

Q: How can investors protect themselves from the potential risks associated with stock split?

A: Investors can protect themselves from the potential risks associated with stock split by:

Conducting thorough research: Investors should conduct thorough research on the company and its stock split before making an investment decision.
Considering multiple factors: Investors should consider multiple factors, including company performance, economic conditions, and market sentiment, before making an investment decision.
Diversifying their portfolio: Investors should diversify their portfolio to minimize the risk of financial losses associated with stock split.

Conclusion

In conclusion, the impact of stock split on stock prices and trading volumes is a complex topic that requires careful consideration. Investors should be aware of the potential risks and benefits associated with stock split and take steps to protect themselves from financial losses. By conducting thorough research, considering multiple factors, and diversifying their portfolio, investors can make informed investment decisions and minimize the risk of financial losses associated with stock split.