Repurchases, Reputation, and Returns

Bonaimé, Alice A.

doi:10.2139/ssrn.1361800

Cited by 19 publications

(31 citation statements)

References 33 publications

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“…However, there is no obligation for a firm to actually make the repurchases it has announced, nor is there any commitment about the timing of repurchases it actually does (Jagannathan et al 2000). Since 2004, firms have been required to disclose the number of shares and average price of repurchased shares in subsequent quarterly and annual financial filings (Bonaimé 2012).…”

Section: These Measures Include Basel Iii's Capital Conservation Buffmentioning

confidence: 99%

“…For these reasons, a firm can increase or decrease its actual repurchases without necessarily attracting immediate public attention and sending a signal about future profitability. 6 While firms are required to disclose the number of shares and average price of shares repurchased under publicly announced repurchase programs in their quarterly and annual financial statements (Bonaimé 2012), these disclosures come after the repurchases have been executed. This stands in contrast to dividend payments, which in the banking industry are typically approved by a BHC's board of directors on a quarterly basis and disclosed via a press release.…”

Section: Bhc Dividends and Repurchases During The Financial Crisismentioning

confidence: 99%

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Bank Holding Company Dividends and Repurchases during the Financial Crisis

Hirtle

2014

SSRN Journal

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Many large U.S. bank holding companies (BHCs) continued to pay dividends during the 2007-09 financial crisis, even as financial market conditions deteriorated, large losses accumulated, and emergency capital and liquidity were being provided by the official sector. In contrast, share repurchases by these BHCs dropped sharply in the early part of the crisis. Documenting this divergent behavior is one of the key contributions of this paper. The paper also examines the role that repurchases played in large BHCs' decisions to reduce or eliminate dividends. The key findings are that smaller BHCs in the sample with higher levels of repurchases before the financial crisis reduced dividends later and by less than BHCs with lower pre-crisis repurchases, suggesting that repurchases may have served as a cushion against cutting dividends. In contrast, there is only a weak relationship between pre-crisis repurchases and the timing and extent of dividend reductions for the larger BHCs, even though these BHCs were more likely overall to reduce or eliminate dividends during the crisis.

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Section: These Measures Include Basel Iii's Capital Conservation Buffmentioning

confidence: 99%

Section: Bhc Dividends and Repurchases During The Financial Crisismentioning

confidence: 99%

Bank Holding Company Dividends and Repurchases during the Financial Crisis

Hirtle

2014

SSRN Journal

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“…Chemmanur and Li (2014) finds that institutional trading immediately after an open market repurchase announcement has significant predictive power for the actual purchases by the firm. Bonaimé (2012) documents that a firm's reputation from prior repurchase activities is a determinant of the current repurchase completion rate. Firms have higher announcement returns of new share repurchase programs given they completed their prior programs.…”

Section: Further Imentioning

confidence: 99%

“…They find that firms buyback around 82% of the announced shares. Oded (2009) and Bonaimé (2012) use the same SDC data as I do but examine difference sample periods. They find firms complete 92% and 73% of the announced programs, respectively.…”

Section: Are Repurchases Really Flexiblementioning

confidence: 99%

Are Open Market Share Repurchase Programs Really Flexible?

2017

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“…Many studies report evidence of better operating or abnormal stock performances after the repurchase announcement for those firms with higher repurchase completion rates (Stephens and Weisbach, ; Ikenberry et al ., ; Lie, ; Zhang, ; Chan et al ., , ; Oded, ; Bonaimé, ; Wang et al ., ; Ishikawa and Takahashi, ). Only a few studies find that managers do not exhibit superior long‐term performances when they make open‐market actual repurchases (Rees, ; Rau and Vermaelen, ; McNally et al ., ).…”

mentioning

confidence: 99%

Earnings Surprises in Analysts' Forecasts, Mandatory Disclosure, and Share Repurchases

Liu

Chen

2015

Abacus

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This paper examines the impact of forecast errors and the mandatory disclosure of repurchase transactions required by 2003 Securities and Exchange Commission (SEC) regulations on share repurchases. We define forecast errors as the difference between analysts' forecasted earnings and actual earnings. We argue that firms with positive forecast errors imply greater information asymmetry, which may induce them to signal through share repurchases. We show that both the repurchase target and analysts' forecast revision are positively related to forecast errors. Furthermore, these associations are more pronounced in the low disclosure period (1989)(1990)(1991)(1992)(1993)(1994)(1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002)(2003) where greater information asymmetry between managers and outside investors is found, while increased transparency in the high disclosure period (2004)(2005)(2006) leads to more significant improvement in longterm performances for firms with positive forecast errors. The results are consistent with our expectations that the information asymmetry implied in forecast errors, along with a shock change from the introduction of the 2003 SEC regulation, affect both corporate and analysts' behaviour.

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Repurchases, Reputation, and Returns

Cited by 19 publications

References 33 publications

Bank Holding Company Dividends and Repurchases during the Financial Crisis

Bank Holding Company Dividends and Repurchases during the Financial Crisis

Are Open Market Share Repurchase Programs Really Flexible?

Earnings Surprises in Analysts' Forecasts, Mandatory Disclosure, and Share Repurchases

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