The Price Impact of Open Market Share Repurchases
نویسندگان
چکیده
منابع مشابه
Takeover vulnerability and the credibility of signaling: The case of open-market share repurchases
There is debate in the literature focuses on whether open market repurchases can be taken as a signal of stock undervaluation. This research argues that takeover pressures before a repurchase announcement can be a credible signal of undervaluation. The empirical results indicate that repurchasing firms with a higher probability of takeover experience greater announcement effects, improvements i...
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In the efficient market framework, it seems difficult to explain why a firm would actually buy back its outstanding shares after the stock price goes up in response to an open-market repurchase announcement. We introduce the subject of market inefficiency in a way similar to the explanation of Shleifer and Vishny (1990, 1997) and reexamine corporate open-market repurchase strategy and stock pri...
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Managers conduct open market repurchases ("OMRs") for many different reasons, including to distribute excess cash. However, the most widely discussed explanation for OMRs is the "signaling theory": that managers announce OMRs to signal that the stock is underpriced. The first purpose of this paper is to show that the signaling theory is theoretically problematic—in part because it assumes manag...
متن کاملOpen market share repurchases in Germany : A conditional event study approach
We analyze the decision to announce an open market share repurchase and the share price reaction to the announcement. We use a conditional estimation approach which takes into account that the repurchase decision is made rationally and that, consequently, there is a potential selection bias. This approach requires a ‘non-event sample’ of firms that could reasonably be expected to announce a rep...
متن کاملInformation Signaling or Agency Conflicts: What Explains Canadian Open Market Share Repurchases?
This paper examines open market share repurchases in Canada (called Normal Course Issuer Bids—NCIB). Similar to announcements of U.S. open market share repurchases, announcements of Canadian NCIBs are accompanied by a positive stock price reaction. If NCIBs signal information, then it is not in the same manner as U.S. repurchases. Canadian firms usually announce the legal maximum proportion of ...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2011
ISSN: 1556-5068
DOI: 10.2139/ssrn.1780967