Document Type

Article

Publication Date

2024

DOI

10.1111/jbfa.12814

Publication Title

Journal of Business Finance & Accounting

Volume

Article in Press

Pages

1-47

Abstract

We use earnings call transcripts to examine whether managers strategically change their disclosure behaviors before an actual share repurchase. Our findings suggest that managers use tone management to strategically portray a more negative outlook for the firm in the earnings call before an actual repurchase. In addition, we find that managers of repurchasing firms “cast” the call with more unfavorable analysts even when more favorable analysts are available. These disclosure strategies aim to influence the information flows to the market and allow repurchasing firms to repurchase their shares at a discounted price. We further show that insiders of repurchasing firms adjust their subsequent stock trading accordingly. Following more negative conference calls, insiders exhibit a tendency to increase share repurchases or reduce sales of company shares. Our findings underscore the increasingly sophisticated disclosure strategies employed by managers to wield influence over information dynamics in the market leading up to share repurchases.

Rights

© 2024 The Authors.

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND 4.0), which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.

Data Availability

Article states: "The data used in this study is publicly available from the sources indicated in the text."

ORCID

0000-0002-1893-0981 (Duong)

Original Publication Citation

Duong, H. K., Do, C., & Do, H. N. (2024). Managers' staging of earnings conference calls around actual share repurchases. Journal of Business Finance & Accounting. Advance online publication. https://doi.org/10.1111/jbfa.12814

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