Pooling and Rescinded or Forgone Stock Repurchases

This study analyzed the impact of COVID-19, which, in 2020, globally increased uncertainty about the stock repurchase of South Korean listed companies. The results suggest that the market reaction to stock repurchases during the COVID-19 period was significantly subdued. In particular, the market reaction to KOSPI companies, on stock repurchase, was positive, while it was negative in the case of KOSDAQ companies. It has also been reported that the market ranks lower on the reliability of the signal after the onset of COVID-19. This means that if a company discloses a stock repurchase in a situation where the value of the market as a whole has declined, it cannot be accepted as an undervalued signal. Furthermore, it was revealed that the market responded more positively to the announcement of repurchases by companies that had actively managed shareholder wealth by repeatedly making stock repurchases before COVID-19. These results suggest that companies should always be aware of this, as the market response to stock repurchases in market shockers such as COVID-19 is weaker. Additionally, managers can manage their stock prices more effectively through stock repurchases during market shockers if they consistently manage their stock prices through stock repurchases when companies are undervalued.

Incomplete Share Repurchase Programs in Vietnam: Completion Rates and Short-Term Returns

International Journal of Financial Studies ◽

10.3390/ijfs8030057 ◽

2020 ◽

Vol 8 (3) ◽

pp. 57

Author(s):

Kien Cao ◽

Thuy Nguyen ◽

Hong Nguyen ◽

Hien Bui

Keyword(s):

Corporate Governance ◽

Earnings Management ◽

Stock Prices ◽

Management Practices ◽

Investor Protection ◽

Stock Repurchases ◽

Tobit Regression ◽

Stock Repurchase ◽

The Impact ◽

Repurchase Programs

Stock repurchases have become a preferred method of distributing cash to stockholders. However, given the high level of information asymmetry and weak corporate governance as well as poor investor protection in Vietnam, many Vietnamese firms use stock repurchases as a tool to manipulate stock prices in the market. Using event study methodology and Tobit regression models, this study examines the stock price behaviors surrounding the event dates and the impact of earnings management activities prior to the stock repurchases on the completion of repurchase announcements in Vietnam. The results show that earnings management practices prior to stock repurchase programs, the percentage of intended buyback shares, and CEO characteristics have a significant impact on the completion of these repurchase programs. Moreover, most of the windows surrounding the event dates do not have any significant abnormal movement of the stock prices. A plausible explanation is that, due to weak corporate governance and poor investor protection, Vietnamese firms send lots of misleading signals through various corporate activities, especially stock repurchase programs. Thus, these signals have less meaning to investors.

Short-Term Price Effects of Stock Repurchases in Turkish Capital Markets

International Journal of Economics and Finance ◽

10.5539/ijef.v7n12p29 ◽

2015 ◽

Vol 7 (12) ◽

pp. 29 ◽

Cited By ~ 1

Author(s):

Burak Pirgaip ◽

Semra Karacaer

Keyword(s):

Capital Markets ◽

Stock Prices ◽

Company Law ◽

Stock Repurchases ◽

Open Market ◽

Short Term ◽

Stock Repurchase ◽

Listed Firms ◽

Commercial Code ◽

Signaling Hypothesis

Stock repurchase, as a corporate finance tool and a substitute for cash dividends, plays an important role in distributing excess cash. Following a prohibited period due to its potentially negative outcomes for shareholders and creditors, stock repurchase has recently been regulated within the company law systems of many countries pursuant to its increasing popularity in satisfying special financing requirements of companies. That the regulatory improvements have removed the uncertainty inherent in such transactions has increased the volume of, especially, the open market stock repurchases. Turkish legislation, <em>i.e.</em> <em>Commercial Code and Capital Markets Law</em>, has latterly been updated in accordance with EU acquis communautaire in order to allow stock repurchase for listed firms. We analyse movements in stock prices after stock repurchase transactions in order to make inferences about why stock repurchase is used and what its impacts/signals are in Turkish market at their infancy stage. Having followed a standard event study methodology, the results reveal that investor reaction to stock repurchase transactions is generally positive in the short-term. These results support the notion of a signaling hypothesis as a motivator behind stock repurchase decisions.

USING TWO-PART QUANTILE REGRESSION TO ANALYZE HOW EARNINGS SHOCKS AFFECT STOCK REPURCHASES

Annals of Financial Economics ◽

10.1142/s2010495214400107 ◽

2014 ◽

Vol 09 (02) ◽

pp. 1440010 ◽

Cited By ~ 1

Author(s):

CHIH-YI CHI ◽

SHIH-TI YU ◽

YI TZU LI ◽

YU-LUNG LU

Keyword(s):

Quantile Regression ◽

Probit Model ◽

Stock Repurchases ◽

Stock Repurchase ◽

High Quantiles ◽

Dollar Amount ◽

Buy Back ◽

Part Model

We examine whether firms tend to buy back their stocks to a greater extent when the managers learn there will be positive earnings impacts. We use a two-part model (Duan et al., 1983) to address this issue. First, we use a Probit model to estimate the decision of stock repurchase. Then we use Koenker and Bassett's (1978) quantile regression to estimate the dollar amount of stock repurchases. We find that when the earnings impacts are in the low quantiles, stock repurchases and earning impact are positively correlated. However, when the impacts are in the high quantiles, the relation becomes reversed.

Dividends versus Stock Repurchases and Long-Run Stock Returns under Heterogeneous Beliefs

The Review of Corporate Finance Studies ◽

10.1093/rcfs/cfab002 ◽

2021 ◽

Author(s):

Onur Bayar ◽

Thomas J Chemmanur ◽

Mark H Liu

Keyword(s):

Stock Returns ◽

Project Success ◽

Heterogeneous Beliefs ◽

Stock Repurchases ◽

External Financing ◽

Stock Repurchase ◽

Dividend Payment ◽

Long Run

Abstract We analyze a firm’s choice between dividends and stock repurchases under heterogeneous beliefs. Firm insiders, owning a certain fraction of equity, choose between paying out cash available through a dividend payment or a stock repurchase, and simultaneously choose the scale of the firm’s project. Outsiders have heterogeneous beliefs about project success and may disagree with insiders. In equilibrium, the firm distributes value through dividends alone, through a repurchase alone, or through a combination of both. In some situations, the firm may raise external financing to fund its payout. We also develop results for long-run stock returns following dividends and repurchases.

Clawback Provision of SOX, Financial Misstatements, and CEO Compensation Contracts

Journal of Accounting Auditing & Finance ◽

10.1177/0148558x16686740 ◽

2017 ◽

Vol 34 (1) ◽

pp. 74-98 ◽

Cited By ~ 1

Author(s):

Ramachandran Natarajan ◽

Kenneth Zheng

Keyword(s):

Ceo Compensation ◽

Securities And Exchange Commission ◽

Money Stock ◽

Financial Reports ◽

Compensation Contracts ◽

Sarbanes Oxley ◽

Financial Misstatements ◽

Financial Misstatement ◽

The Impact ◽

To Receive

Section 304 of the Sarbanes-Oxley Act (hereafter, SOX), commonly known as the clawback provision, entitles the Securities and Exchange Commission (SEC) to sue the CEO and CFO in an attempt to recover their incentive compensation based on misstated financial reports. Although a stream of literature investigates the effects of voluntary firm-initiated clawback provisions, this study explores the effects of the mandatory SOX clawback provision on the likelihood of financial misstatements and CEO compensation. We find a significant decrease in the association between CEO in-the-money option value and the likelihood of a financial misstatement surrounding SOX, suggesting the SOX clawback provision has been effective in reducing financial misstatements arising from CEO in-the-money stock options. To examine the effects of the SOX clawback provision on CEO compensation, we identify a set of misstatement firms with a high restatement likelihood where the CEOs are most likely concerned with the impact of the SOX clawback provision on their compensation. We find that compared with control firms, these misstatement firms with a high restatement likelihood where the CEO is the chair of the board exhibit an increase in CEO salaries between the pre- and post-SOX periods, suggesting that in the post-SOX period, powerful CEOs are able to receive higher salaries which are not subject to the SOX clawback provision.

The Proxy Problem: Using Nonprofits to Solve Misaligned Incentives in the Proxy Voting Process

Michigan Business & Entrepreneurial Law Review ◽

10.36639/mbelr.9.2.proxy ◽

2020 ◽

pp. 235

Author(s):

Leah Duncan

Keyword(s):

Conflicts Of Interest ◽

Complete Information ◽

Securities And Exchange Commission ◽

Best Interest ◽

Proxy Voting ◽

The Status ◽

Investment Manager ◽

The Subject ◽

Voting Decisions ◽

Institutional Shareholders

Proxy advisory firms and their influence on the proxy voting process have recently become the subject of great attention for the Securities and Exchange Commission (“SEC”) among other constituencies. A glance at recent proxy season recaps and reports, many of which devote space to discussing proxy advisory firm recommendations, reveal the significance of this influence on institutional voting. As Sagiv Edelman puts it, “proxy advisory firms exist at the nexus of some of the most high-profile corporate law discussions—most notably, the shareholder voting process, which has recently been the subject of much scholarly and legal debate.” The SEC has responded by announcing that it intends to reform the regulations, or lack thereof, surrounding proxy advisory firms. Recently, the SEC issued proposed amendments to Exchange Act Rule 14(a)-1 which would effectively codify their earlier interpretation of solicitation under this rule. The proposed amendment would “condition the availability of certain existing exemptions from the information and filing requirements . . . for proxy voting advice businesses upon compliance with additional disclosures and procedural requirements.” Furthermore, the amendments would clarify when a lack of disclosure of certain information in proxy voting advice compromises the accuracy of the advice and misleads within the meaning of the rule. The SEC believes that these extra requirements will “help ensure that investors who use proxy voting advice receive more accurate, transparent, and complete information on which to make their voting decisions.” Based on this proposal, it is apparent that the SEC is intent on rectifying some of the problems of transparency and conflicts of interest associated with proxy advisory firms. Given the increasing influence of proxy advisory firms, the misalignment of incentives between proxy firms and the institutional shareholders who use proxy firm services is troubling. This Note identifies inherent problems and concerns with proxy advisory firms and offers solutions to these issues with a focus on eliminating conflicts of interest. Using Henry Hansmann’s theory of ownership, this Note argues that nonprofit ownership of proxy advisory firms eliminates both information asymmetry and conflicts of interest inherent to the current ownership structure. Part I provides a brief overview of the problems and concerns associated with proxy advisory firms. Part II suggests two potential solutions: that Rule 206(4)-6 of the Investment Adviser Act of 1940 should be repealed or alternatively, that nonprofit ownership through investment company associations is a more effective way for investment management companies to comply with their fiduciary duties. Because profit incentive has created conflicts of interest that lead to proxy advice that may not always be in the best interest of investment manager clients, nonprofit ownership promotes transparency that allows parties who rely on the advice to make more independent decisions. Part III argues that nonprofit ownership is the most viable alternative to the status quo.

Religiously Affiliated Healthcare Institutions

Reproductive Ethics in Clinical Practice ◽

10.1093/med/9780190873028.003.0004 ◽

2021 ◽

pp. 29-43

Author(s):

Lori Freedman ◽

Debra Stulberg

Keyword(s):

United States ◽

Medical Care ◽

Moral Distress ◽

The United States ◽

Accurate Information ◽

Religious Institutions ◽

Best Interest ◽

Religiously Affiliated ◽

United States Healthcare ◽

To Receive

Religious hospitals represent a large and growing share of the United States healthcare system. As these networks expand their reach, patients may face additional threats to their ability to receive care based on their own values. Physicians practicing in religious institutions—especially in Catholic hospitals—have experienced moral distress when prevented from providing medical care in accordance with the patient’s best interest, and many are surprised by the scope of restrictions under Catholic directives. Patients need accurate information about the care they can expect to receive in religious institutions. However, many lack awareness and knowledge of how to identify religious institutions and services available. This chapter addresses the history, clinical conflicts, bioethical concerns, and empiric literature about reproductive care in US religious healthcare institutions, focusing on Catholic health systems.

Outsourcing of Medical Surgery and the Evolution of Medical Telesurgery

Medical Informatics ◽

10.4018/978-1-60566-050-9.ch184 ◽

2011 ◽

pp. 2455-2464

Author(s):

Shawna Sando

Keyword(s):

Healthcare System ◽

Medical Tourism ◽

Healthcare Providers ◽

Healthcare Services ◽

Medical Professionals ◽

Best Interest ◽

Negative Effects ◽

Foreign Institution ◽

To Receive ◽

The U.S

With rising and often unreasonable costs in the U.S. healthcare system, Americans are becoming more inclined to seek cheaper alternatives. In some cases, Americans do not have to search for such alternatives on their own because their employers are offering them incentives to receive care from a foreign institution. Employees can go abroad to countries, such as India, in order to receive medical services for prices that are at least half of what the procedure would cost in the U.S. This emerging market seems to be beneficial to all involved except U.S. healthcare providers; however, this outsourcing of healthcare services sends a powerful international message. It seems that the U.S. has a healthcare system that cannot adequately serve all economic classes of the American public. In contrast, though India has the proper facilities and professionals, there are concerns regarding malpractice litigation, postoperative care, and possible negative effects on the Indian public. Having given consideration to all affected constituencies, it seems that the outsourcing of medical procedures is in the best interest of lower- and middle-class Americans as well as medical professionals in India. In reality, though medical tourism is receiving much attention, it will most likely not be a pressing concern for the American market in the near future. A widening discrepancy in the Indian public may, however, be cause for nearer concern. This new trend does foreshadow a push for more preventative changes in the business of U.S. healthcare, such as the development of information technology specific to the growing international healthcare market. Whereas, it will initially be beneficial to send patients abroad, with the evolution of technology, the latter ideal will instead be to have medical professionals abroad that care for patients located in the U.S.

Outsourcing of Medical Surgery and the Evolution of Medical Telesurgery

Outsourcing and Offshoring of Professional Services - Advances in Electronic Commerce ◽

10.4018/978-1-59904-972-4.ch008 ◽

2008 ◽

pp. 157-166 ◽

Cited By ~ 1

Author(s):

Shawna Sando

Keyword(s):

Healthcare System ◽

Medical Tourism ◽

Healthcare Providers ◽

Healthcare Services ◽

Medical Professionals ◽

Best Interest ◽

Negative Effects ◽

Foreign Institution ◽

To Receive ◽

The U.S

With rising and often unreasonable costs in the U.S. healthcare system, Americans are becoming more inclined to seek cheaper alternatives. In some cases, Americans do not have to search for such alternatives on their own because their employers are offering them incentives to receive care from a foreign institution. Employees can go abroad to countries, such as India, in order to receive medical services for prices that are at least half of what the procedure would cost in the U.S. This emerging market seems to be beneficial to all involved except U.S. healthcare providers; however, this outsourcing of healthcare services sends a powerful international message. It seems that the U.S. has a healthcare system that cannot adequately serve all economic classes of the American public. In contrast, though India has the proper facilities and professionals, there are concerns regarding malpractice litigation, postoperative care, and possible negative effects on the Indian public. Having given consideration to all affected constituencies, it seems that the outsourcing of medical procedures is in the best interest of lower- and middle-class Americans as well as medical professionals in India. In reality, though medical tourism is receiving much attention, it will most likely not be a pressing concern for the American market in the near future. A widening discrepancy in the Indian public may, however, be cause for nearer concern. This new trend does foreshadow a push for more preventative changes in the business of U.S. healthcare, such as the development of information technology specific to the growing international healthcare market. Whereas, it will initially be beneficial to send patients abroad, with the evolution of technology, the latter ideal will instead be to have medical professionals abroad that care for patients located in the U.S.