← Search

Journal of Finance Vol. 55 No. 5 2000

Stock Repurchases in Canada: Performance and Strategic Trading

David Ikenberry1; Josef Lakonishok2; Theo Vermaelen2,3,4,5,1

1 Rice University · 2 National Bureau of Economic Research · 3 University of Illinois Urbana-Champaign · 4 Maastricht University · 5 Institut National de Statistique et d'Economie Appliquée

open access

Abstract

During the 1980s, U.S. firms announcing stock repurchases earned favorable long‐run returns. Recently, concerns have been raised over the robustness of these findings. This concern comes at a time of explosive growth in repurchase programs. Thus, we study new evidence from the 1990s for 1,060 Canadian repurchase programs. Moreover, because of Canadian law, we can carefully track repurchase activity monthly. Similarly to the situation in the United States, the Canadian stock market discounts the information in repurchase announcements, particularly for value stocks. Completion rates in Canada are sensitive to mispricing. Trades also appear linked to price movements; managers buy more shares when prices fall.

DOI
10.1111/0022-1082.00291
Volume
55
Issue
5
Pages
2373-2397
Language
en
Sources
bibtex:phds-export.bib openalex crossref

Cite