Extinction of the Buyback/Secondary Offering Effect?

Past research indicates that returns for stocks associated with share buybacks (secondary offerings) tend to be abnormally high (low) in subsequent years, suggesting that management successfully times the market and investors respond slowly to the timing signal. Do these findings persist in recent data? In their June 2011 paper entitled “The Persistence of Long-Run Abnormal Stock Returns: Evidence from Stock Repurchases and Offerings”, Fangjian Fu, Sheng Huang and Hu Lin extend this research to recent years based on three widely used abnormal stock return estimation methods applied to holding periods of 24, 36 and 48 months. They define recent years as 2003-2008. Using data for 13,992 open market stock repurchases during 1984-2008 and 5,917 seasoned equity offerings (SEO) during 1980-2008, they find that:

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