Reit Open-Market Stock Repurchases and Profitability

Posted: 6 Aug 2009

See all articles by Gow-Cheng Huang

Gow-Cheng Huang

Alabama State University - Department of Accounting and Finance

Kartono Liano

Mississippi State University - Department of Finance and Economics

Ming-Shiun Pan

Shippensburg University - Department of Finance and Management Information & Analysis

Date Written: August 5, 2009

Abstract

This study examines whether the announcement of REIT open-market stock repurchase programs contain information content about future operating performance over the period 1990-2001. We find no evidence that REIT stock buybacks are positively related to the operating performance. In fact, the operating performance of our sample REIT firms peak at the repurchase announcement year and deteriorate in the years following the announcement of share repurchases. Nevertheless, the sample REITs show higher levels of post-repurchase operating performance when compared to those of the pre-repurchase period. Additionally, our regression analysis shows that changes in future operating performance can explain the positive announcement effect.

Keywords: REITs, stock repurchases, profitability

JEL Classification: G14, G35

Suggested Citation

Huang, Gow-Cheng and Liano, Kartono and Pan, Ming-Shiun, Reit Open-Market Stock Repurchases and Profitability (August 5, 2009). Journal of Real Estate Finance and Economics, Vol. 39, No. 4, 2009. Available at SSRN: https://ssrn.com/abstract=1444515

Gow-Cheng Huang

Alabama State University - Department of Accounting and Finance ( email )

P.O. Box 271
Montgomery, AL 36101-0271
United States
334-229-6920 (Phone)
334-265-0914 (Fax)

Kartono Liano (Contact Author)

Mississippi State University - Department of Finance and Economics ( email )

P.O. Box 9580
Mississippi State, MS 39762
United States
601-325-1981 (Phone)
601-325-1977 (Fax)

Ming-Shiun Pan

Shippensburg University - Department of Finance and Management Information & Analysis ( email )

Shippensburg University
Shippensburg, PA 17257
United States
717-477-1683 (Phone)
717-477-4067 (Fax)

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