Repurchases after being well known as good news

Inmoo Lee, Yuen Jung Park, Neil D. Pearson

Research output: Contribution to journalArticlepeer-review


Using recent U.S. data, we find that long-horizon abnormal returns following repurchase announcements made after 2001 are much lower than those following earlier announcements. The equity-linked compensation of senior management of buyback firms exceeds that of matching firms, especially for repurchases announced after 2001. Transient institutional investors equity holdings of buyback firms are smaller than their holdings of matching firms following buyback announcements by repeat repurchasers during 2002–2006. The results suggest that many recent buybacks have not been motivated by fundamentals-based factors such as undervaluation, and that non-fundamentals-based factors such as managerial self-interest have become more important.

Original languageEnglish (US)
Article number101552
JournalJournal of Corporate Finance
StatePublished - Jun 2020
Externally publishedYes


  • Payout policies
  • Share repurchases

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Economics and Econometrics
  • Strategy and Management


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