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 journal › Article

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.
@article{5e30d7ced9844829b6c264ad8651cb64,
title = "The effects of ownership and stock liquidity on the timing of repurchase transactions",
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.",
keywords = "open market repurchase, timing, ownership, liquidity",
author = "{De Cesari}, Amedeo and Susanne Espenlaub and Arif Khurshed and Michael Simkovic",
note = "Copyright 2012 Elsevier B.V., All rights reserved.",
year = "2012",
month = "12",
doi = "10.1016/j.jcorpfin.2012.06.004",
language = "English",
volume = "18",
pages = "1023--1050",
journal = "Journal of Corporate Finance",
issn = "0929-1199",
publisher = "Elsevier",
number = "5",

}

De Cesari, A, Espenlaub, S, Khurshed, A & Simkovic, M 2012, 'The effects of ownership and stock liquidity on the timing of repurchase transactions', Journal of Corporate Finance, vol. 18, no. 5, pp. 1023-1050. https://doi.org/10.1016/j.jcorpfin.2012.06.004

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 journal › Article

TY - JOUR

T1 - The effects of ownership and stock liquidity on the timing of repurchase transactions

AU - De Cesari, Amedeo

AU - Espenlaub, Susanne

AU - Khurshed, Arif

AU - Simkovic, Michael

N1 - Copyright 2012 Elsevier B.V., All rights reserved.

PY - 2012/12

Y1 - 2012/12

N2 - 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.

AB - 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.

KW - open market repurchase

KW - timing

KW - ownership

KW - liquidity

UR - http://www.scopus.com/inward/record.url?scp=84864331614&partnerID=8YFLogxK

U2 - 10.1016/j.jcorpfin.2012.06.004

DO - 10.1016/j.jcorpfin.2012.06.004

M3 - Article

AN - SCOPUS:84864331614

VL - 18

SP - 1023

EP - 1050

JO - Journal of Corporate Finance

JF - Journal of Corporate Finance

SN - 0929-1199

IS - 5

ER -

De Cesari A, Espenlaub S, Khurshed A, Simkovic M. The effects of ownership and stock liquidity on the timing of repurchase transactions. Journal of Corporate Finance. 2012 Dec;18(5):1023-1050. https://doi.org/10.1016/j.jcorpfin.2012.06.004

Access to Document