Targeted Repurchases and Common Stock Returns

Wayne H. Mikkelson and Richard S. Ruback

RAND Journal of Economics, 1991, vol. 22, issue 4, 544-561

Abstract: We examine whether the actions of the blockholder and repurchasing managers in targeted repurchases of common stock benefit the repurchasing firm's stockholders. Positive stock returns from the time of the initial investment through the repurchase indicate that blockholders' actions benefit stockholders. We argue that the negative stock price reaction to a repurchase does not resolve whether the decision to repurchase helps or harms stockholders. That determination depends on the alternatives forgone by the repurchasing managers. A low incidence of reported takeover events before and after block repurchases suggests that repurchases typically are not undertaken in place of a takeover of the firm.

Date: 1991
References: Add references at CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://links.jstor.org/sici?sici=0741-6261%2819912 ... O%3B2-H&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rje:randje:v:22:y:1991:i:winter:p:544-561

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in RAND Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().