Do Firms Buy Their Stock at Bargain Prices? Evidence from Actual Stock Repurchase Disclosures

Using new data we investigate open-market repurchase execution of S&P 500 firms. We find that smaller firms repurchase less frequently than larger firms, and at prices which are significantly lower than average market
prices. Their repurchase activity is followed by a positive and significant abnormal return which lasts up to three months after the repurchase. These findings do not hold for large S&P 500 firms. Consistent with these
findings, we show that the market response to the disclosure of actual repurchase data is positive and significant only for small firms, and that insider trading is positively related to actual repurchases.

Avi Wohl holds a BSc in Mathematics and Computer Sciences from Tel Aviv University, an MSc in Management Sciences - Operations Research from Tel Aviv University's Faculty of Management and a PhD in Finance, also from Tel Aviv University's Faculty of Management.

Prof. Wohl has published papers in leading academic journals including Journal of Finance, Review of Financial Studies, Journal of Financial Economics, Journal of Financial and Quantitative Analysis, Journal of Business, Management Science and Journal of Banking and Finance.