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Managers' Trading Around Stock Repurchases
Author(s) -
LEE D. SCOTT,
MIKKELSON WAYNE H.,
PARTCH M. MEGAN
Publication year - 1992
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/j.1540-6261.1992.tb04690.x
Subject(s) - business , tender offer , stock (firearms) , share repurchase , dutch auction , stock price , monetary economics , open market operation , finance , economics , marketing , corporate governance , shareholder , auction theory , mechanical engineering , monetary policy , bidding , paleontology , revenue equivalence , series (stratigraphy) , biology , engineering
We analyze personal open market trades by managers around stock repurchases by tender offer. With the exception of Dutch auction offers, managers trade their firm's shares prior to repurchase announcements as though repurchases convey favorable inside information to outsiders. Prior to fixed price repurchase offers that do not follow takeover‐related events, managers increase their buying and reduce their selling of their firm's shares. Prior to repurchases that follow takeover‐related events, only a decrease in selling is found. No abnormal trading precedes Dutch auction repurchase offers.