Do Share Buybacks Provide Price Support? Evidence From Mandatory Non‐Trading Periods
利用伦敦证券交易所强制非交易期，研究股票回购是否支撑股价，发现回购暂停时股价下跌，但效应主要限于中期业绩公告前，且经济与统计显著性中等。
Abstract: Financial regulators, analysts and journalists have expressed concern that open market share repurchases may help support share prices. We test this conjecture by examining repurchasing firms' share price patterns on entering mandatory non‐trading periods imposed by the London Stock Exchange. If buybacks provide price support, we would expect to observe price declines when trading bans force firms to suspend their buyback program. Consistent with claims that open market buybacks provide price support, we document average price declines when repurchasing firms enter mandatory non‐trading periods. We also find that the magnitude of the price decline varies cross‐sectionally with proxies for the price support impact of repurchases in the predicted manner. However, economic and statistical significance levels are moderate and largely confined to non‐trading periods preceding interim results announcements, casting doubt on whether trading profits could be earned by exploiting this information.