Insider trading around open-market share repurchases

Fei Leng () and Kevin Zhao ()

Journal of Economics and Finance, 2014, vol. 38, issue 3, 491 pages

Abstract: We examine insider trading around open-market share repurchases and find that insiders trade passively in 3 months prior to repurchase announcements and in up to 12 months following the announcements. Furthermore, both pre-announcement and post-announcement abnormal insider trading is unrelated to short-term announcement returns but correlated with long-term post-announcement returns. Our results indicate that corporate insiders trade passively around repurchase announcements in accordance with their perceived undervaluation to exploit the long-run abnormal stock returns related to the events. Copyright Springer Science+Business Media, LLC 2014

Keywords: Insider Trading; Open Market Share Repurchase; Long-Term Stock Performance; G30; G32 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s12197-012-9227-x

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