Do managers intentionally use repurchase tender offers to signal private information? Evidence from firm financial reporting behavior

• 成果类型: Article
• 署名作者: Louis, Henock; White, Hal
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2006.08.003
• 发表日期: 2007
• 页码: 205-233
• 关键词: repurchase tender offers; signaling; managerial opportunism; Financial reporting

摘要

Signaling is the most commonly cited explanation for stock repurchases in the academic literature. Yet, there is little evidence on whether managers intentionally use repurchases as signaling devices. Using a firm's financial reporting behavior to infer managerial intent, we find evidence suggesting that managers intentionally use fixed-price repurchase tender offers to signal undervaluation. In contrast, we find no evidence that managers use Dutch-auction tender offers to signal undervaluation. Instead, firms engaging in Dutch-auction repurchases act as if they are trying to deflate their earnings prior to the repurchases to further reduce the repurchasing price. (c) 2007 Elsevier B.V. All rights reserved.