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ETF ownership and seasoned equity offerings

ETF ownership and seasoned equity offerings
ETF ownership and seasoned equity offerings
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.
ETF Ownership, Post-Issue Performance, SEO Propensity, Seasoned Equity Offerings
0022-1090
Evans, Kevin P.
e8653f68-5d2e-4ac9-8c3a-074b8187787c
Leung, Woon Sau
73a8bf54-6035-4f11-a9ec-74272abbacb5
Li, Junqiu
292cbb4e-faa1-421b-870d-c4175798e89e
Mazouz, Khelifa
efb38409-bd94-45ab-ba50-aa5b8640f614
Evans, Kevin P.
e8653f68-5d2e-4ac9-8c3a-074b8187787c
Leung, Woon Sau
73a8bf54-6035-4f11-a9ec-74272abbacb5
Li, Junqiu
292cbb4e-faa1-421b-870d-c4175798e89e
Mazouz, Khelifa
efb38409-bd94-45ab-ba50-aa5b8640f614

Evans, Kevin P., Leung, Woon Sau, Li, Junqiu and Mazouz, Khelifa (2023) ETF ownership and seasoned equity offerings. Journal of Financial and Quantitative Analysis. (doi:10.1017/S002210902300042X).

Record type: Article

Abstract

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.

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Accepted/In Press date: 2023
e-pub ahead of print date: 11 April 2023
Additional Information: Publisher Copyright: © 2023 Cambridge University Press. All rights reserved.
Keywords: ETF Ownership, Post-Issue Performance, SEO Propensity, Seasoned Equity Offerings

Identifiers

Local EPrints ID: 484588
URI: http://eprints.soton.ac.uk/id/eprint/484588
ISSN: 0022-1090
PURE UUID: 0f93350d-e7a7-4803-a274-b147c99ac717
ORCID for Woon Sau Leung: ORCID iD orcid.org/0000-0002-0389-2126

Catalogue record

Date deposited: 17 Nov 2023 17:55
Last modified: 18 Mar 2024 04:17

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Contributors

Author: Kevin P. Evans
Author: Woon Sau Leung ORCID iD
Author: Junqiu Li
Author: Khelifa Mazouz

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