Share Repurchase Offers and Liquidity: An Examination of Temporary and Permanent Effects
Abstract"Open-market repurchase programs do not allow for precise estimates of share buy-back intensity to measure liquidity effects. To circumvent the uncertainty surrounding the quantity and timing of shares truly acquired in repurchase programs and to measure their long-term impact, we examine Dutch auctions and fixed-price tender offers. We investigate both the temporary and permanent liquidity effects of share repurchase programs and find that the improvement in liquidity is transitory and limited to the tender period when the firm's offer to repurchase shares is outstanding. Improvements in liquidity over longer intervals appear to be the result of an overall price improvement and a reduction in volatility rather than the result of structural change in market dynamics." Copyright (c) 2008 Financial Management Association International..
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Bibliographic InfoArticle provided by Financial Management Association International in its journal Financial Management.
Volume (Year): 37 (2008)
Issue (Month): 2 (06)
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Postal: University of South Florida 4202 E. Fowler Ave. COBA #3331, Tampa, FL 33620
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0046-3892
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- Himmelmann, Achim & Schiereck, Dirk, 2012. "Drug approval decisions: A note on stock liquidity effects," Journal of Empirical Finance, Elsevier, vol. 19(5), pages 640-652.
- Michael Firth & T. Y. Leung & Oliver M. Rui, 2008.
"Double Signals or Single Signal? An Investigation of Insider Trading Around Share Repurchases,"
222008, Hong Kong Institute for Monetary Research.
- Firth, Michael & Leung, T.Y. & Rui, Oliver M., 2010. "Double signals or single signal? An investigation of insider trading around share repurchases," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 20(4), pages 376-388, October.
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