Director Purchases Talk and Buybacks Whisper

We investigate share repurchases and directors' purchase in the UK due to the uniqueness of its disclosure framework allowing for very timely and accurate information on the aforementioned trades. We give fresh evidence on the relatively unexplored question whether managers conduct buybacks or insiders purchase shares for market timing or price support, in the UK. We provide evidence on the difference in magnitude of the signalling effect between buybacks and insider trades. We find the directors time their trades for both share buybacks and their personal trades. In addition, we find that insider purchases have a larger (but "cheap") and short-lived impact on share prices, whereas buybacks have a gradually (but "expensive") increasing impact.