Signaling or insider opportunism: an investigation of repurchase activity in Vietnam

This paper examines whether share repurchase announcements are signals of undervaluation or insiders’ opportunistic activities by investigating insider trading patterns surrounding buyback in Vietnam. Consistent with the opportunism hypothesis, we show that insiders net buyers before but they sell intensively after event. We also find subsequent selling not followed an improvement firms’ operating performance associated underperformance long-term stock returns. Overall, our findings suggest a proportion Vietnam subject to opportunism; therefore, short-swing rules should be regulated limit opportunistically around announcements.