Purpose This study investigates the valuation motive for increasing share repurchases: the authors analyze the trading dynamics between short sellers, institutional investors and the firm itself around share repurchases. Design/methodology/approach The authors examine the valuation motive for share repurchases through an analysis of firm, institutional and short sellers' trading behavior. The firm-level panel regression models using firm-quarter observations in the sample period are estimated. Findings The authors find that firms repurchase more intensely against increased short selling and that institutional investors trade in parallel with the repurchasing firm. Originality/value Results suggest that firms disagree with short sellers' intrinsic valuation of the firm, which is consistent with findings of recent studies such as Muzere (2019) and Bargeron and Bonaime (2020).