TY  - JOUR
AU  - Ikenberry,David
AU  - Lakonishok,Josef
AU  - Vermaelen,Theo
TI  - Market Underreaction to Open Market Share Repurchases
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4965
PY  - 1994
Y2  - December 1994
UR  - http://www.nber.org/papers/w4965
L1  - http://www.nber.org/papers/w4965.pdf
N1  - Author contact info:
David Ikenberry
Office of the Dean 
Leeds School of Business
University of Colorado
Office Koelbel S310
Boulder, CO 80309-0584
Tel: 303-492-1809
Fax: 303-492-7676
E-Mail: David.Ikenberry@Colorado.edu

Josef Lakonishok
University of Illinois, Department of Finance
College of Commerce & Business Administration
1206 S. Sixth Street
Champaign, IL 61820
Tel: 217/333-7185
Fax: 217/244-1151
E-Mail: jlakonishok@yahoo.com
M2  - featured in NBER digest on 1995-03-01
AB  - We examine long-run firm performance following open market share repurchase announcements which occurred during the period 1980 to 1990.  We find that the average abnormal four-year buy-and-hold return measured after the initial announcement is 12.1 percent.  For `value' stocks, companies more likely to be repurchasing shares because of undervaluation, the average abnormal return is 45.3 percent.  For repurchases announced by `glamour' stocks where undervaluation is less likely to be an important motive, no positive drift in abnormal returns is observed.  Thus, at least with respect to value stocks, the market errs in its initial response and appears to ignore much of the information conveyed through repurchase announcements.
ER  -