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Information and Long-Term Stock Performance Following Open-Market Share Repurchases


  • The authors are grateful for helpful comments from William McNally and two anonymous referees of the journal. They also thank participants at the 2011 Northern Finance Association and Financial Management Association annual meetings for their comments and suggestions.

Corresponding author: University of Washington Tacoma, Milgard School of Business, 1900 Commerce St., Tacoma, WA 98402-3100; Phone: (253) 692-5628; Fax: (253) 692-4523; E-mail:


We find that firm managers have private information when they decide on open-market share repurchases, and that this information is significantly correlated with announcement period and post-announcement abnormal returns. We further find that long-term post-announcement abnormal returns are related to private information differently for firms that actually repurchase shares when compared to firms that announce a repurchase program but do not acquire shares. Our results indicate that managers’ private information is only ambiguously revealed by the repurchase announcement, and that the market waits for the firm's subsequent actions, such as actual repurchase, to further interpret the private information.

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