The effects of ownership and stock liquidity on the timing of repurchase transactions

Amedeo De Cesari, Susanne Espenlaub, Arif Khurshed, Michael Simkovic

Research output: Contribution to journalArticle

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.
Original languageEnglish
Pages (from-to)1023-1050
Number of pages28
JournalJournal of Corporate Finance
Volume18
Issue number5
DOIs
Publication statusPublished - Dec 2012

Fingerprint

Ownership
Liquidity
Repurchase
Stock repurchases
Profit
Ownership structure
Insider ownership
Shareholders
Institutional ownership
Disclosure requirements

Keywords

  • open market repurchase
  • timing
  • ownership
  • liquidity

Cite this

De Cesari, Amedeo ; Espenlaub, Susanne ; Khurshed, Arif ; Simkovic, Michael. / The effects of ownership and stock liquidity on the timing of repurchase transactions. In: Journal of Corporate Finance. 2012 ; Vol. 18, No. 5. pp. 1023-1050.
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The effects of ownership and stock liquidity on the timing of repurchase transactions. / De Cesari, Amedeo; Espenlaub, Susanne; Khurshed, Arif; Simkovic, Michael.

In: Journal of Corporate Finance, Vol. 18, No. 5, 12.2012, p. 1023-1050.

Research output: Contribution to journalArticle

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