Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 1, 2020 erstellt
Beschreibung:
Our study investigates the true valuation motive for increasing share repurchases. To do so, we analyze the contemporaneous trading dynamics between short sellers, institutional investors and the firm itself around the actual share repurchases. We regress quarterly changes in share repurchases on quarterly changes in short interest and quarterly changes in institutional holdings. We find that firms repurchase more intensely against increased short selling and that institutional investors trade in parallel with the repurchasing firm. The inclusion of changes in institutional holdings into our regression models enables our study to support the undervaluation motive for driving firm's management to increase repurchasing activity. We posit that firms disagree with short seller's intrinsic valuation of the firm where consistent with previous literature we find that this disagreement subsequently leads to positive abnormal returns after the share repurchases