ETF Ownership and Seasoned Equity Offerings
Journal of Financial and Quantitative Analysis, Forthcoming.
57 Pages Posted: 4 Jan 2023
Date Written: December 25, 2022
This paper investigates the impact of ETF ownership on seasoned equity offerings (SEOs). We find that increases to firms’ ETF ownership is positively related to their propensity to conduct an SEO. ETF ownership is also associated with less negative SEO announcement returns, smaller discounts, and better long-run stock returns. Our evidence is consistent with equity issuance following investor demand for stocks driven by greater participation in ETFs, suggesting a possible alternative source of market timing opportunity.
Keywords: ETF Ownership, Seasoned Equity Offerings, SEO Propensity, Post-Issue Performance
JEL Classification: G11, G32
Suggested Citation: Suggested Citation