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The Effects of Ownership and Stock Liquidity on the Timing of Repurchase Transactions
Amedeo De Cesari
Aston University - Aston Business School - Finance & Accounting Group
Susanne Espenlaub
University of Manchester - Manchester Business School
Arif Khurshed
University of Manchester - Manchester Business School, Division of Accounting Finance
Michael Simkovic
Seton Hall Law School; Harvard Law School - John M. Olin Center for Law and Economics
June 6, 2012
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.
Number of Pages in PDF File: 59
Keywords: open market repurchase, timing, ownership, liquidity
JEL Classification: G35, G38
working papers series
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Date posted: July 12, 2011
; Last revised: August 26, 2012
Suggested CitationDe Cesari, Amedeo, Espenlaub, Susanne, Khurshed, Arif and Simkovic, Michael, The Effects of Ownership and Stock Liquidity on the Timing of Repurchase Transactions (June 6, 2012). Available at SSRN: http://ssrn.com/abstract=1884171 or http://dx.doi.org/10.2139/ssrn.1884171
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