Investor Attention and Actual Share Repurchases

This thesis examines the relationship betweeninstitutionalinvestor attentionon the day ofan actual open-market sharerepurchaseand the short-termprice reaction afterwards. The sample consists of 3917 open-market share repurchases conducted on the Stock Exchange of Hong Kong during the period 2011 to 2018. By making use of the Bloomberg terminal’s news searching and reading activityscorefor stocks, a direct measure for institutional investor attention is created. Evidence is found that investor attention has a negative effect on short-termprice reactions after share buybacks. This result implies that the documented positive price developments after share repurchases are driven by repurchasesthat did not receive appropriate attention from institutional investors.