Public companies are basically 'day trading' their own stock to boost their market value by about 1% every year.
SSRN · March 17, 2026 · 6299880
The Takeaway
The paper finds that firms often issue new shares when prices are high and buy them back when prices are low within the same 12-month period. This 'roundtripping' allows the typical firm to capture an 0.80% increase in market capitalization, suggesting corporations are much better at timing the market than economic theory allows for.
From the abstract
We test the theoretical prediction of Bond and Zhong (2016) that firms directly profit from repeated equity market transactions of seasoned equity offers (SEOs) and share repurchases. We study firms that issue and repurchase shares within a twelve-month period and report that firms typically issue new shares at substantially higher prices than they repurchase shares. Further, the typical firm repurchases almost 40% of the primary shares it issues, resulting in an increase in market capitalizatio