IDEAS home Printed from
   My bibliography  Save this article

Targeted Repurchases and Common Stock Returns


  • Wayne H. Mikkelson
  • Richard S. Ruback


We examine whether the actions of the blockholder and repurchasing managers in targeted repurchases of common stock benefit the repurchasing firm's stockholders. Positive stock returns from the time of the initial investment through the repurchase indicate that blockholders' actions benefit stockholders. We argue that the negative stock price reaction to a repurchase does not resolve whether the decision to repurchase helps or harms stockholders. That determination depends on the alternatives forgone by the repurchasing managers. A low incidence of reported takeover events before and after block repurchases suggests that repurchases typically are not undertaken in place of a takeover of the firm.

Suggested Citation

  • Wayne H. Mikkelson & Richard S. Ruback, 1991. "Targeted Repurchases and Common Stock Returns," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 544-561, Winter.
  • Handle: RePEc:rje:randje:v:22:y:1991:i:winter:p:544-561

    Download full text from publisher

    File URL:
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See for details.

    As the access to this document is restricted, you may want to search for a different version of it.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Jafarinejad, Mohammad & Jory, Surendranath R. & Ngo, Thanh N., 2015. "The effects of institutional ownership on the value and risk of diversified firms," International Review of Financial Analysis, Elsevier, vol. 40(C), pages 207-219.
    2. Parrino, Robert, 1997. "Spinoffs and wealth transfers: The Marriott case," Journal of Financial Economics, Elsevier, vol. 43(2), pages 241-274, February.
    3. Julian FRANKS & Colin MAYER & MIYAJIMA Hideaki & OGAWA Ryo, 2018. "Stock Repurchases and Corporate Control: Evidence from Japan," Discussion papers 18074, Research Institute of Economy, Trade and Industry (RIETI).
    4. Pearce II, John A. & Robinson, Richard Jr., 2004. "Hostile takeover defenses that maximize shareholder wealth," Business Horizons, Elsevier, vol. 47(5), pages 15-24.
    5. 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.
    6. Karyn L. Neuhauser & Wallace N. Davidson & John L. Glascock, 2011. "An analysis of failed takeover attempts and merger cancellations," International Journal of Managerial Finance, Emerald Group Publishing, vol. 7(4), pages 347-376, September.
    7. Harris, Oneil & Glegg, Charmaine, 2009. "Governance quality and privately negotiated stock repurchases: Evidence of agency conflict," Journal of Banking & Finance, Elsevier, vol. 33(2), pages 317-325, February.
    8. Peyer, Urs C. & Vermaelen, Theo, 2005. "The many facets of privately negotiated stock repurchases," Journal of Financial Economics, Elsevier, vol. 75(2), pages 361-395, February.
    9. James M. Mahoney & Chamu Sundaramurthy & Joseph T. Mahoney, 1995. "The differential impact on stockholder wealth of various antitakeover provisions," Research Paper 9512, Federal Reserve Bank of New York.
    10. Hadani, Michael & Goranova, Maria & Khan, Raihan, 2011. "Institutional investors, shareholder activism, and earnings management," Journal of Business Research, Elsevier, vol. 64(12), pages 1352-1360.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rje:randje:v:22:y:1991:i:winter:p:544-561. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.