Patriotic Stock Repurchases: The Two Weeks Following the 9–11 Attack

Patriotic Stock Repurchases: The Two Weeks Following the 9–11 Attack The September 11, 2001 terrorist attacks created a unique situation where patriotism became a significant motive for companies to make stock buyback announcements. Officials from the stock markets and the SEC encouraged stock repurchase announcements to help stabilize the markets. However, some analysts questioned the wisdom of repurchase announcements at this time of economic uncertainty, given that buybacks reduce the firm's cash and equity. This study finds that announcements made during the two weeks following the attacks had a positive effect on a firm's stock price. It was also found that the earlier the announcement following the attacks, generally the more positive the market response. This suggests the possibility of a “patriotism effect” where the firms most eager to show their patriotism were rewarded by patriotic investors. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Quantitative Finance and Accounting Springer Journals

Patriotic Stock Repurchases: The Two Weeks Following the 9–11 Attack

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2003 by Kluwer Academic Publishers
Subject
Finance; Corporate Finance; Accounting/Auditing; Econometrics; Operation Research/Decision Theory
ISSN
0924-865X
eISSN
1573-7179
D.O.I.
10.1023/A:1023624512713
Publisher site
See Article on Publisher Site

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