Abstract
We analyze detailed monthly data on U.S. open market stock repurchases (OMRs) that recently became available following stricter disclosure requirements. We find evidence that OMRs are timed to benefit non-selling shareholders. We present evidence that the profits to companies from timing repurchases are significantly related to ownership structure. Institutional ownership reduces companies' opportunities to repurchase stock at bargain prices. At low levels, insider ownership increases timing profits and at high levels it reduces them. Stock liquidity increases profits from timing OMRs. © 2012 Elsevier B.V.
Original language | English |
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Pages (from-to) | 1023-1050 |
Number of pages | 27 |
Journal | Journal of Corporate Finance |
Volume | 18 |
Issue number | 5 |
DOIs | |
Publication status | Published - Dec 2012 |
Event | American Law and Economics Conference - Stanford, USA Duration: 1 Jan 1824 → … |
Keywords
- Liquidity
- Open market repurchase
- Ownership
- Timing