| dc.description.abstract | Little is known about the price impact and timing of actual share repurchases.
Data unavailability has hindered research in most countries, including
the United States. Using unique data on actual share repurchase transactions
from Norway, we test for the price impact and timing of daily open
market repurchases. We find evidence that share repurchases typically follow
after a negative drift in the stock price, and the average three-day abnormal
return around the announcement is 0.54%. Moreover, the initial market reaction
is greater for repurchases that are pursued by small firms and for
firms that experience a negative drift in the stock price prior to the transaction.
The evidence presented is seemingly indicative of managers’ intent
to signal undervaluation through repurchase transactions. However, we do
not find any significant long-term abnormal returns for repurchasing firms.
This result suggests that on average, managers do not time the market based
on informational advantage. | nb_NO |
