Information and Long-Term Stock Performance Following Open-Market Share Repurchases

We find that firm managers have private information when they decide on openmarket share repurchases, and that this information is significantly correlated with announcement period and post-announcement abnormal returns. We further find that long-term postannouncement abnormal returns are related to private information differently for firms that actually repurchase shares when compared to firms that announce a repurchase program but do not acquire shares. Our results indicate thatmanagers' private information is only ambiguously revealed by the repurchase announcement, and that the market waits for the firm's subsequent actions, such as actual repurchase, to further interpret the private information.