Share Issues versus Share Repurchases

Philip Bond, Yue Yuan and Hongda Zhong

No 20329, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Almost all firms repurchase shares through open market repurchase (OMR) programs. In contrast, issue methods are more diverse: both at-the-market offerings, analogous to OMR programs, and SEOs, analogous to rarely-used tender-offer repurchases, are used by significant fractions of firms. Furthermore, average SEOs are larger than at-the-market offerings. We show that this asymmetry in the diversity of transaction methods in issuances and repurchases and the size-method relation in issuances are natural consequences of the single informational friction of a firm having superior information to investors. Moreover, repurchasing firms are likely maximizing long-term shareholders' payoffs rather than boosting short-term share prices.

Keywords: Asymmetry (search for similar items in EconPapers)
JEL-codes: G31 G32 G35 (search for similar items in EconPapers)
Date: 2025-06
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP20329 (application/pdf)

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:cpr:ceprdp:20329

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP20329

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().