ETF Ownership and Seasoned Equity Offerings

Kevin P. Evans; Woon Sau Leung; Junqiu Li; Khelifa Mazouz

doi:10.1017/S002210902300042X

ETF Ownership and Seasoned Equity Offerings

Kevin P. Evans, Woon Sau Leung^*, Junqiu Li, Khelifa Mazouz

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

Abstract / Description of output

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.

Original language	English
Journal	Journal of Financial and Quantitative Analysis
Early online date	11 Apr 2023
DOIs	https://doi.org/10.1017/S002210902300042X
Publication status	E-pub ahead of print - 11 Apr 2023

Keywords / Materials (for Non-textual outputs)

ETF Ownership
Seasoned Equity Offerings
SEO Propensity
Post-Issue Performance

Access to Document

10.1017/S002210902300042X

EvansEtalJFQA2022ETFOwnershipAccepted author manuscript, 1.92 MBLicence: Creative Commons: Attribution (CC-BY)

Cite this

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title = "ETF Ownership and Seasoned Equity Offerings",

abstract = "This paper investigates the impact of ETF ownership on seasoned equity offerings (SEOs). We find that increases to firms{\textquoteright} 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",

author = "Evans, {Kevin P.} and Leung, {Woon Sau} and Junqiu Li and Khelifa Mazouz",

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AU - Mazouz, Khelifa

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N2 - 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.

AB - 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.

KW - ETF Ownership

KW - Seasoned Equity Offerings

KW - SEO Propensity

KW - Post-Issue Performance

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ETF Ownership and Seasoned Equity Offerings

Abstract / Description of output

Keywords / Materials (for Non-textual outputs)

Access to Document

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Cite this