Investor opinion divergence and post-repurchase announcement stock price drift

This study examines whether investor opinion divergence is a significant determinant of post-repurchase abnormal returns. We examine the effect using abnormal trading turnover (ATO) ratio as a proxy for investor opinion divergence. While the OLS regression results show that investor opinion divergence is not related to post-repurchase performance, the quantile regression results show that the effect of investor opinion divergence on post-repurchase performance is not homogeneous across various quantile levels of post-repurchase performance. We find a positive relation between ATO ratio and post-repurchase performance for firms with lower-to-middle performance groups. For firms with middle-to-higher post-repurchase performance, pre-repurchase stock undervaluation is a key determinant of the post-repurchase performance.