Abstract
This paper highlights a concern for a link possibly missing in the traditional justification of the signaling hypothesis of open-market repurchases (OMRs). To recover the missing link, we employ the order-level data for the Taiwan stock market to contrast the order submission behaviors among different groups of investors surrounding OMR announcements - who trade the repurchased stocks and how they trade them. As a result, only from the standpoint of price behavior, OMR announcements are reliable signals to which the price reactions of those stocks are favorable. However, the observed order submission behaviors among most investors contradict the essence of the signaling hypothesis.
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