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Due to insufficient disclosure on open market share repurchases in the USA, at any given point in time, outside shareholders have no knowledge of whether their firm is executing open market share repurchase trades. It is hypothesized that such information disparity between outside shareholders and insiders of a repurchasing firm creates asymmetric opportunities for insiders to time their sell trades in a period when the firm is engaged in buyback trading of its own shares. Insiders have an incentive to sell when the firm is in the market supporting the price by repurchasing its shares. The purpose of this study is to examine this hypothesis (insider timing hypothesis) by investigating insiders' trading activities during the periods of corporate share buyback trading.

Multiple regression analyses are used to explore relations among trades by insiders, corporate share buyback trades, and a number of other control variables.

This study finds evidence that insiders do increase the net number of shares sold in a fiscal quarter when the firm is in the market engaged in share buyback trading.

This study suggests the possibility of insiders' opportunistic trading behavior during the periods of corporate open market share buyback trading.

Regardless of their motives, acquiring firms almost always have to offer a premium to the shareholders of the acquired firm in acquisitions. That is, the value of the securities or cash paid by the acquirers is higher than the premerger market price of the acquired firm's common stock. The size of the merger premiums, as a percentage of the pre‐merger market price of the acquired firm's common stock, could vary from 20 per cent to 115 per cent. Several empirical studies examining the factors that determine the size of merger premiums have had limited success. Since the merger premium could affect the probability of success of a merger attempt and the wealth of the shareholders of both the acquiring and the acquired firms, continued efforts to improve our understanding of merger premium determination is essential. This paper investigates empirically the premiums paid in 66 mergers consummated between 1975 and 1979.

The preceeding article has examined some of the motivations behind the high premiums offered shareholders of target firms in acquisitions and mergers. In essence, the acquirers appear to be looking for gains largely through enhanced efficiency of operations or by the replacement of inefficient management.

This study aims to examine a large, non-disclosed production contract awarded to Lockheed Corp. in the context of a trade-off between a contractually required non-disclosure clause and the need (as a publicly traded firm) to disclose material information to its shareholders. This production contract generated significant cash flows to the firm as evidenced by growth in its earnings. However, the existence of the production contract and its contribution to Lockheed’s earnings, was not disclosed by the firm to shareholders and potential investors while the production contract was being executed.

The authors examine the market reaction to several key contract events which were not disclosed at the time they occurred, in compliance with the contractually required non-disclosure clause.

A statistically significant stock price reaction around the time of the award of this non-public contract, indicative of trading by some capital market participants using non-public information was documented.

Because similar large non-public contracts funded by the government are common in the industrial economy, we conclude by discussing implications for organizational structure, firm’s cost of capital, equity-based compensation and market efficiency.